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postheadericon What is a bankruptcy discharge?

What does it mean to get a bankruptcy discharge?

The discharge order issued by a bankruptcy court is the end result of a successful Chapter 7 or Chapter 13 Bankruptcy filing.   As your St. Louis bankruptcy attorney will definitely tell you, not all debts are subject to the bankruptcy discharge.

The bankruptcy discharge under Chapter 7 and Chapter 13 bankruptcy is an order from the court.  This order says that your creditors cannot hold your personal liable for the debt.  In essence, the debt has been eliminated.  The bankruptcy discharge, however, does not generally get rid of liens.  If you have a lien on a car or home, the discharge will not get rid of your obligation to pay the debt if you want to keep the collateral.  Read more about what a reaffirmation agreement is.

You will not always get a bankruptcy discharge on taxes.  If your income taxes are incurred within the last three years, you will still owe them at the end of your bankruptcy.  Sales taxes and withholding taxes from your business are never subject to a bankruptcy discharge.  You can use a Chapter 13 Bankruptcy to pay back taxes if you can’t get rid of them in bankruptcy.

Student loans are almost never eliminate by a bankruptcy discharge.  However, you can use a Chapter 13 Bankruptcy as a tool to reduce student loan payments and defer interest until later.

Additionally, debts incurred by fraud are not discharged.  If you lied on a credit application, or incurred much of your debt in the months prior to filing, that may be fraud.  However, the creditors have to prove fraud in order to avoid the bankruptcy discharge.

Please call to talk to a St. Louis Bankruptcy Attorney to found out what debts are subject to the bankruptcy discharge.

Sean C. Paul, attorney, explains what a bankruptcy discharge means to you

Sean C. Paul is licensed to practice law in the State of Missouri.  His practice is located in south St. Louis County.

Sean C. Paul will give you the individual attention you deserve.  He understands the importance of your financial decisions.  He wants to help you make the best choice, whether it’s a Chapter 7 or a Chapter 13 Bankruptcy.

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