What Is a Bankruptcy Discharge?

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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 a proficient Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you through this.

According to New York State law, what is a bankruptcy discharge?

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. More specific examples are as follows:

  • You may no longer be liable for your mounting medical bills.
  • You may no longer be liable for your lingering personal loans.
  • You may no longer be liable for your remaining credit card debts.
  • You may no longer be liable for the obligations you failed to meet under a lease or a different contract.

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 take away with your filing. Examples of these debts are as follows:

  • Any missed child support payments.
  • Any missed alimony payments.
  • Any tax debts or liens.
  • Any fines that you owe a government agency.
  • Any money that you owe someone for a personal injury case that was your fault.
  • Any criminal restitution that you owe for a crime that you have committed.
  • Any debts that you failed to include in your bankruptcy petition.

The hope is that, with your dischargeable debts no longer in the picture, it may be more feasible to pay off these non-dischargeable debts.

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. Just some of the highlights for this new process are as follows:

  • 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 of student loan borrowers is reduced, so much so that they do not feel the need to file for bankruptcy.

So, before it is too late, you must retain the services of a talented Rockland County bankruptcy attorney. We are ready and willing to take on your proceedings.