You may decide to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy if you have amassed a certain amount of debt that is too overwhelming to fully pay off. Though not all of your debt will automatically disappear when declaring bankruptcy. Follow along to find out what a bankruptcy discharge is and how to become a proficient Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you through this.
What Is a Bankruptcy Discharge?
A bankruptcy discharge is a court order issued by a federal bankruptcy court that eliminates a debtor’s legal obligation to repay certain debts. Once a debt is discharged, creditors are strictly prohibited from attempting to collect the debt in any capacity, including through lawsuits, wage garnishment, or phone calls. Receiving a bankruptcy discharge is one of the primary benefits of this process, as it allows filers to receive a “fresh start.”
This process is commonly referred to as debt elimination, as it removes the legal obligation to repay certain unsecured debts. Once the discharge order is issued by the court, creditors must immediately cease all collection efforts. This protection is enforced under federal bankruptcy law, applying nationwide, including to cases filed through the United States Bankruptcy Court, Southern District of New York, which is where cases filed in Rockland County are generally heard.
Simply put, a bankruptcy discharge is a court order that releases you from specific debts and obligations that you owe to your creditors. In other words, the New York bankruptcy court will eliminate your responsibility for paying off certain types of debts.
Examples of Debts that May Be Discharged
- Medical bills
- Personal loans
- Credit card balances
- Utility bills
- Civil judgments not involving fraud or misconduct
Debts That Generally Cannot Be Discharged
In contrast to the above dischargeable debts, there are also non-dischargeable debts. As you can likely conclude, these are specific debts and obligations that the New York bankruptcy court will not eliminate when you file:
- Child support payments
- Alimony payments
- Tax debts or liens
- Fines that you owe a government agency
- Money that you owe someone for a personal injury case that was your fault
- Criminal restitution that you owe for a crime that you have committed
- Debts you failed to include in your bankruptcy petition
- Most federal and private student loans (unless you can prove special hardship circumstances)
- Debts obtained through fraud
How Long Does It Take to Receive a Bankruptcy Discharge?
For filers in New York, understanding the bankruptcy discharge process, including how long you can expect this process to take, is critical to adequately prepare to file. However, the timing of the discharge will heavily depend on whether you file Chapter 7 or Chapter 13, as these are two different legal processes with different timelines.
Chapter 7 Bankruptcy Discharge Timeline
If you file for Chapter 7 bankruptcy and meet all the legal requirements:
- Most eligible debts are discharged within three to six months after the petition has been filed
- The court will confirm discharge eligibility
- Creditors are informed that they are no longer able to pursue collections
Chapter 13 Bankruptcy Discharge Timeline
In Chapter 13 bankruptcy, a discharge typically occurs following the successful completion of a court-approved repayment plan. These plans generally last:
- Three years for lower-income filers
- Five years for higher-income filers
Once the plan has been successfully completed and all legal requirements have been satisfied, the bankruptcy court can order the discharge.
How Do You Obtain a Bankruptcy Discharge in Rockland County?
If you are a filer in Nanuet, Nyack, or Pearl River looking to discharge eligible debts through bankruptcy, it’s important to understand that you generally must complete a number of mandatory steps as part of this process. Failure to successfully complete your bankruptcy case can result in dismissal, ultimately leaving you liable for the outstanding debts.
Required Steps in a New York Bankruptcy Case
- Attend the 341 meeting of creditors
- Complete the required credit counseling pre-bankruptcy course
- Cooperate with the trustee assigned to your case throughout the process
- Provide all required documents and financial statements
- Continue making payments on non-dischargeable debts
- Complete a debtor education post-bankruptcy course
What Is The Discharging Process For Student Loans?
Of note, in November 2022, both the Department of Justice and the Department of Education announced a new discharging process for federal student loans in bankruptcy. However, you should note that you cannot simply include these debts in your bankruptcy petition, as you must demonstrate “undue hardship” through a separate legal process. As such, it is important to note that:
- This new process will ensure that there is consistent treatment for discharging federal student loans.
- This new process will ensure that there is better identification for when a bankruptcy discharge of federal student loans is appropriate.
- This new process will ensure that the burden on student loan borrowers is reduced, so much so that they do not feel the need to file for bankruptcy.
While student loan debt may not be discharged, it’s important to understand that this process can be incredibly complex, as it typically requires the filer to undergo an adversary proceeding to prove that their loans are causing undue hardship.
Contact an Experienced Rockland County Bankruptcy Attorney
If you are considering the benefits of bankruptcy, it’s imperative to work with an experienced attorney with the Law Offices of Allen A. Kolber, Esq. Our firm understands that bankruptcy can be an incredibly overwhelming process, which is why we are committed to doing everything in our power to help you navigate this process. Contact us today to learn how we can represent you.
