Some debts are discharged as part of many bankruptcies. A discharge of debt under bankruptcy means you are freed from the obligation to pay it. Naturally, knowing when a discharge will go through is one of the top concerns of Kentucky bankruptcy filers. The U.S. Courts website explains some factors that affect when a discharge will be approved by a bankruptcy court.
When a discharge can actually occur depends on which chapter you file. Discharges generally happen about four months after a debtor files a Chapter 7 petition with the clerk of the bankruptcy court. However, in bankruptcies that involve paying off debt instead of liquidation, the waiting time can be much longer. A Chapter 13 filing, for instance, may involve repaying debts over a period of five years. Debt discharges in this case may take about four years or however long it takes to complete debt repayments.
Circumstances can cause debt discharges to be delayed. In Chapter 7 bankruptcy, discharges can be challenged by a number of parties, such as a creditor, the trustee involved in the case, or the U.S. trustee. These challenges must be filed within a certain time period and can result in additional proceedings that can delay the discharge. A creditor, for example, may initiate a lawsuit called an adversary proceeding that contests a discharge.
Challenges to discharges are far less likely to occur under Chapter 13. Although it takes longer to reach a discharge under Chapter 13, there is less room for complications brought on by creditors because creditors have no standing to challenge discharges under Chapter 13. Creditors are permitted to object to a repayment plan, but if the debtor has finished paying off the debts as required by the plan, they cannot object to discharges.
Even if a discharge is granted by a court, sometimes a court may revoke the discharge. Revocations typically occur either before the bankruptcy case is closed or within a year after the closing. It usually takes allegations of fraud on the part of the debtor or other violations of the U.S. Bankruptcy code, another area of the law, or violating a court procedure for a court to consider revoking a discharge.
This article is written to inform viewers about discharges in bankruptcy and should not be interpreted as legal advice.