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How do my unsecured debt become discharged?
Discharge is bankruptcy term of art that provides relief from payment obligations under the bankruptcy code. Once the case has been properly administered, the individual who filed for bankruptcy is granted a discharge of the unsecured debt that is owed. In a chapter 7, a discharge is usually provided within 6 month of filing, but can vary.
When administration of the bankruptcy estate is concluded, a debtor's remaining unsecured debt owed to credit companies, pay day lenders, utility companies and other creditors whose claim is against you are eliminated. This is known as a discharge.
A discharge is one of THE main and influential reasons people file for bankruptcy. Often times, tens of thousands of dollars in credit card debt is discharged, however, proper case administration is needed in order to be afforded a discharge.
Under section 523 of the bankruptcy code specific types of debts are listed, that are no entitled to a discharge. These items include, but are not limited to:
* Taxes owed to the State and Federal government (there are exceptions to this rule that can be assessed on a case by case basis);
* Debts incurred through fraud, false pretenses or false representations;
* Student loans;
* Domestic support obligations such as child support or alimony;
* Willful and malicious injury to an entity or property of another entity;
* Fines from government unit or entities; and
* Death or personal injury to another by the debtor during the use of a vehicle, vessel or aircraft while intoxicated.
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