When are debts actually discharged under Chapters 7 and 13?

While there are countless financial intricacies involved in individual bankruptcy, many people are aware that a bankruptcy comes off of a person's credit report after a period of seven to 10 years. Still, beyond that mark, few people are familiar with the dates by which debts are discharged under personal bankruptcy.

A discharge is the official forgiveness of a debt after a person has filed a bankruptcy petition and the petition has been granted. Not every single debt a person has can be discharged; for example, neither public nor private student loans are currently dischargeable under bankruptcy, with very few exceptions. Still, if one has filed Chapter 7 bankruptcy in Mississippi, many of their other outstanding debts are likely to be discharged. Usually, the actual discharge takes place a few months after all the bankruptcy paperwork has been filed and processed.

After the official discharge takes place, the filer no longer owes money to those creditors. Under the other common type of personal bankruptcy, Chapter 13, the filer commits to a reasonable repayment plan for a period of usually five years, and after consistently chipping-away at their debts for several years the remaining balance can be discharged if the court approves. It's important to keep in mind that the debts discharged are unsecured and must be allowable.

Bankruptcy is almost always a tough decision, but it can be an extremely beneficial one for those whose debts are truly unmanageable. In addition to discharging many debts, personal bankruptcy can also stop repossession and stop foreclosure in many cases. Bringing one's financial facts to a local bankruptcy attorney is one way to learn more about which debts can be forgiven and which type of bankruptcy may be most appropriate.

Source: Fox Business, "When is a bankruptcy officially discharged?" Erica Sandberg, Aug. 4, 2014

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