A Look at Chapter 7 Bankruptcy Discharge

rastid — Sun, 05 Sep 2010 01:07:47 +0000

A discharge releases individual debtors from personal liability for almost all debts and prevents the creditors owed those debts from taking any collection procedures against the debtor. Because a chapter 7 discharge is subject to a great number of conditions, debtors should consult skilled legal counsel before filing to discuss the range of the discharge. In general, excluding cases that are terminated or converted, individual debtors get a discharge in more than 99 percent of chapter 7 cases. In the vast majority of cases, unless a party in interest files a complaint objecting to the discharge or a motion to extend the time to object, the bankruptcy court will issue a discharge order relatively early in the case √± generally, 60 to 90 days following the date first set for the conference of creditors. Fed. R. Bankr. P. 4004(c).

The reasons for denying an individual debtor a discharge in a chapter 7 case are narrow and are construedagainst the moving party. Among other factors, the court may refuse the debtor a discharge if it confirms that the debtor: was unable to keep or produce enough books or financial records; failed to explain satisfactorily any loss of possessions; committed a bankruptcy offense such as perjury; failed to obey a lawful order of the bankruptcy court; fraudulently shifted, concealed, or demolished property that would have become property of the estate; or failed to finish an approved instructional course concerning financial management. 11 U.S.C. – 727; Fed. R. Bankr. P. 4005.

Secured creditors may sustain some rights to confiscate property securing an underlying debt even after a discharge is granted. According to personal circumstances, if a debtor looks forward to to keep specific secured property (such as an automobile), he or she may determine to “reaffirm” the debt. A reaffirmation is a decision between the debtor and the creditor that the debtor will remain liable and will pay all or a portion of the money owed, even though the debt would otherwise be discharged in the bankruptcy. In exchange, the creditor promises that it will not repossess or take back the automobile or other property so long as the debtor proceeds to pay the debt.

If the debtor makes a decision to reaffirm a debt, he or she must do so prior to the discharge is entered. The debtor must sign a written reaffirmation agreement and file it with the court. 11 U.S.C. – 524(c). The Bankruptcy Code requires that reaffirmation agreements carry an extensive set of disclosures described in 11 U.S.C. – 524(k). Among other things, the disclosures must guide the debtor of the amount of the debt being reaffirmed and how it is determined and that reaffirmation means that the debtor’s personal liability for that debt will not be discharged in the bankruptcy. The disclosures also require the debtor to sign and file a statement of his or her current income and expenses which shows that the balance of income paying expenses is sufficient to pay the reaffirmed debt. If the balance is not enough to pay the debt to be reaffirmed, there is a presumption of undue hardship, and the court may decide not to approve the reaffirmation agreement. Unless the debtor is represented by an attorney, the bankruptcy judge must approve the reaffirmation agreement.

If the debtor was represented by an attorney in connection with the reaffirmation agreement, the attorney must approve on paper that he / she cautioned the debtor of the legal effect and aftermaths of the agreement, including a default under the agreement. The attorney must also certify that the debtor was fully informed and voluntarily made the agreement and that reaffirmation of the debt will not create an undue hardship for the debtor or the debtor’s dependents. 11 U.S.C. – 524(k). The Bankruptcy Code requires a reaffirmation hearing if the debtor has not been represented by an attorney during the negotiating of the agreement, or if the court disapproves the reaffirmation agreement. 11 U.S.C. – 524(d) and (m). The debtor may repay any debt voluntarily, however, whether or not a reaffirmation agreement exists. 11 U.S.C. – 524(f).

An individual receives a discharge for most of his or her debts in a chapter 7 bankruptcy case. A creditor may no longer start or continue any legal or other action against the debtor to collect a discharged debt. But not all of an individual’s debts are discharged in chapter 7. Debts not discharged comprise of debts for alimony and child support, certain taxes, debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit, debts for willful and malicious injury by the debtor to another entity or to the property of another entity, debts for death or personal injury caused by the debtor’s operation of an automobile while the debtor was intoxicated from alcohol or other substances, and debts for selected criminal restitution orders. 11 U.S.C. – 523(a). The debtor will still be liable for these types of debts to the extent that they are not paid in the chapter 7 case. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for willful and malicious injury by the debtor to another entity or to the property of another entity will be discharged unless a creditor timely files and prevails in an action to have such debts declared non-dischargeable. 11 U.S.C. – 523(c); Fed. R. Bankr. P. 4007(c).

For help with a Savannah GA chapter 13, contact a Savannah GA bankruptcy attorney. A Savannah bankruptcy lawyer could give you the help you need.

Credit Report After Bankruptcy

admin — Thu, 04 Mar 2010 13:44:10 +0000

Put it back together after bankruptcy loan is easy, but not necessarily be done. Instead of being depressed that I never thought about where to keep the match financial return, it may take active steps to improve recognition. Here are some of the first steps.

One thing, make sure you pay your bills on time. Even after bankruptcy, you’ll probably have to pay rent, electricity, and perhaps even a car payment. Even if the payments rent reported regularly in the credit reporting agency, you can bet that you will be given if you go to all mortgages, the payment of the loan-only tank score more.
The other thing we can do is to use certain types of credit cards very wisely. Chances are likely to be credit card or at least part of the reason that filed for bankruptcy in the first place, but do not fear that a small loan to rebuild your credit. One way you can do to get a secured credit card. Such cards require a deposit, then get one, even if you have a horrible credit rating.

In essence, that where they are, say, a $ 200 deposit to secure your credit card, the credit will be $ 200. Load up your limit, but not, as the deadline for payment, the card company will be able to make a card for your deposit. However, if you use credit cards sparingly and pay off the end of each month, the conduct must be reported to the credit companies concerned, such as credit score slowly rebuilt

Once you have had credit card is safe for a while, you should switch to a credit card unsecured. Once prepared, the medium range, there are many companies you get a card like that. More offer credit card more tempting to misuse, but remember that this is probably an interest rate higher.

Indeed, rebuilding your credit score takes patience and perseverance. You will be able to obtain more credit than the highest score and use credit wisely, the sooner you’ll improve your credit score.

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A Look at Chapter 7 Bankruptcy Discharge

Credit Report After Bankruptcy