Using Chapter 7 Bankruptcy Laws to Get Rid of Your Debts
Chapter 7 usually discharges more debts than other types of bankruptcy in accordance with chapter 7 bankruptcy laws. That means lots of debts are forgiven when a person files chapter 7 bankruptcy and creditors are forbidden from taking further collection actions against the debtors. However, the chapter 7 bankruptcy laws allow many exceptions.
Compliance is key when filing chapter 7 bankruptcy. A debtor must comply with chapter 7 bankruptcy laws in order to not have his or her case rejected, converted or dismissed. To comply with the chapter 7 laws, a debtor often hires a bankruptcy lawyer to help with filing and interpreting the complicated laws.
When the bankruptcy court deems it fit to issue a debtor with a discharge order, the creditors can file complaints to object to the discharge. If creditors do not object, the bankruptcy court will proceed with the discharge order. Often, debtors only have to wait a few months to receive discharge orders if creditors do not object.
Most chapter 7 filers receive discharge orders granted to them but that there are certain circumstances that the court would not issue a discharge. For example, if the court finds that the debtor is taking advantage of the chapter 7 bankruptcy system or actively and willfully transfer assets out of his or her name prior to filing bankruptcy to deceive the court and creditors, then the court will rule against the debtor.
Not every type of debts can be totally discharged. The chapter 7 bankruptcy laws provide secured creditors the rights to seize the properties even when the discharge has been granted. Unsecured creditors on the other hand do not have any rights after the discharge. If a debtor wishes to keep some assets that were used as collaterals for the debts, he or she may reaffirm the debts in order to keep the properties after bankruptcy.
Unsecured creditors must cease collection attempts after the discharge order has been granted. Creditors whose debts have been discharged cannot continue to harass the debtors and pressure them to pay off the debts. Collection agencies must stop all phone calls, letters and other efforts to contact and take action against the debtor.
On top of secured debts, there are many types of debts that are exempt from the discharge under the chapter 7 bankruptcy laws. Examples of debts that will still need to be paid are alimony, child support, taxes and guaranteed loans. Chapter 7 bankruptcy laws are complicated and it is important to know which debts will be forgiven before filing.
