Updates On Bankruptcy Discharge

Mar 5th, 2014 | By | Category: Guide

Bankruptcy is a process for the federal court that aims at helping both businesses and individuals in cleaning up their debts and paying back under the security provided by the bankruptcy court. There are fundamentally two types: liquidation and reorganization.

Liquidation bankruptcy, under Chapter 7 of the bankruptcy code, takes place when you ask the court to have your debts cleared. Some of your assets will then be liquidated or sold by the bankruptcy court. The money regained from the liquidation of your assets are then distributed among your creditors. This form of bankruptcy proceeding goes for four to six months and you only need to appear once at the courthouse is needed.

Once you have bought your house, as soon as six months or so later, you might be in a position to take out an equity loan on your home and consolidate any other debt that you might have since your bankruptcy or debt that couldn’t be part of your bankruptcy.

Furthermore, completion of post-counseling is required after the proceedings. The goal is to teach you financial management to avoid encountering the same position in the future. The bankruptcy discharge won’t be released unless this is fulfilled.

Bankruptcy, although generally advantageous, must be regarded as a last resort. You should work hard to be in full control of your funds to avoid being estranged in difficulties. Discipline is indeed a very crucial trait that needs to be maintained at all times.

Can Debts incurred after bankruptcy be discharged?
If I'm owed by someone who has filed for bankruptcy, but has not yet been discharged, I can't be added, correct? Referring to tenant who moved out after they filed. May I pursue this before the discharge?

  • It depends. If the debt was owed you before the tenant filed bankruptcy, then yes, they probably can (or if it is a significant debt, they could probably even re-open the bankruptcy to add it after the case is closed, although that would cost them a substantial filing fee – $250 – and additional attorney fees to accomplish). If the debt was incurred after the tenant filed bankruptcy, then no, it cannot be added. In the case of rent or damages owed a landlord, whether or not it can be included in the bankruptcy often turns on a close examination of the rental contract – when, exactly, was each amount due – and of canceled checks or receipts (or even the debtor's bank account and the landlord's records) showing when payments were made and when they were not made, compared to when they were due. Here is a simple example. Suppose the tenant owed rent of $100/month for a 12 month period, per an existing lease. The tenant did not pay the rent in November, December, January or February; filed bankruptcy in February, and continued to live there without paying rent in March and April, moving out in April. In this situation, the $100 rent that went unpaid in November, December, January and February would be discharged in bankruptcy, but the March and April rent would not. So the tenant would still owe you $200, which you could take appropriate measures to collect. You could not attempt to collect the $400 that the tenant owed before filing bankruptcy. That would be a violation of the automatic stay (before the debtor receives his or her discharge) or a violation of the discharge order (after the debtor receives his or her discharge). Basically, you cannot attempt to collect pre-petition debts – this could subject you to court imposed penalties, debtor's legal fees, and damages to the debtor. But you can attempt to collect post-petition debts, which cannot be added after-the-fact to the debtor's bankruptcy petition. I am not a lawyer. For real legal advice, you should consult your own attorney.

  • You can waste your time chasing the dept if you like,but you will get no-where.

  • no

  • You can pursue anything. Will you succeed? Very, very unlikely. Even if you can be added the chance of getting any money is extremely slim. So, if you just have time to waste and want to feel like you tried. Go ahead. If you just want to get some money you are owed, forget it.


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