If you have spoken to anyone before about bankruptcy, they probably told you that they received a “discharge” of their debts. I have noticed when I am meeting the clients for the first time and I let them know they are eligible for a discharge they do not normally know what that means. A discharge of your debts is the ultimate goal in bankruptcy. It is the reason, for the most part, that people file bankruptcy. This “discharge” fuels the fresh start of the debtor, as it relieves them of their indebtedness. Debtors can receive a discharge in both Chapter 7 and Chapter 13 bankruptcies. The discharge represents the heart of the fresh start policy that is promoted by the filing of a bankruptcy. A court generally will grant a discharge unless they are not eligible due to a prior filing, or, there is a party objecting to the discharge, due to fraud or some other type of bankruptcy crime. The party that is objecting to the discharge will have the burden of establishing why the discharge should be denied.

Getting a discharge is not normally a problem for most bankruptcy debtors. A discharge in a bankruptcy case terminates any personal liability on the part of the debtor in regards to all debts that occurred before the bankruptcy petition was filed. It also operates as an injunction against any debt collectors or court cases that have been filed in regards to the debts listed in your petition. Creditors will no longer be able to call you regarding that debt, send letters, serve you with a summons or ever be able to collect on a discharged debt. The discharge is a total bar on any collection efforts against the debtor filing the bankruptcy. Since these debts are discharged, it means that the debtor no longer owes on them.

The bankruptcy eliminates all contracts between debtor and creditor, which means that in a Chapter 7, if a debtor wants to retain their automobile, they will have to file a reaffirmation agreement with the Court. A common misconception is that people who file a bankruptcy will lose their vehicle. That is simply not the case. Car loans can be reaffirmed, enabling debtors to keep their vehicles and not affect the car loan in any way.

If you have questions about whether or not you are eligible for a discharge in either a Chapter 7 or Chapter 13 bankruptcy, or if you have any other questions related to bankruptcy, please do not hesitate to give us a call at 636-352-2030 or check out our website at www.klinelawstl.com. We have offices in both St. Charles and St. Louis County and the consultation is always free.