Long Island Bankruptcy Lawyer

Discharging Debt

The final step and the ultimate goal of a bankruptcy proceeding is the discharging of debts.  Once the debts are discharged you are no longer legally obligated to pay, in addition, creditors are no longer allowed to attempt to collect the debt.  In a Chapter 7 bankruptcy, debts are usually discharged within 4 months of the bankruptcy filing.  This could be longer in the event of an objection or other action that could cause a delay in the proceedings.  Chapter 13 bankruptcy requires that debts be discharged at the conclusion of the repayment plan.  This is typically 3 to 5 years.

The Law Firm of Loscalzo and Associates has over 40 years of combined experience with consumer bankruptcy law. We understand the difficult situation that you are in and will do our best to relieve your burden and make your life easier. A Long Island bankruptcy attorney at our firm can answer any questions you may have and by applying sound strategies and common sense solutions, can get you back on financial track sooner then you may think.

Not  Every Debt Can Be Discharged

Not all debts are able to be discharged when you file Chapter 7 or Chapter 13 bankruptcy. There will be some payments that you will be required to make regardless of bankruptcy. In most instances non-dischargeable debts are the same for Chapter 7 and 13, although there are a few exceptions.

Some non-dischargeable debts are:

• Debts not listed in the Bankruptcy claim
• Alimony
• Child Support
• Certain Taxes
• Long term secured debts such as a mortgage
• Student Loans
• Debt incurred as a result of paying non-dischargeable debts
• Costs of criminal proceedings
• Restitution for willful or malicious injuries
• Fraudulent debts

Examples of debts that are dischargeable under Chapter 13 that are non-dischargeable under Chapter 7 are:

• Restitution for willful or malicious property damage
• Property settlements from a divorce or legal separation

There are also some exceptions to dischargeable and non-dischargeable debts. These are:

• Liens on a secured debt can be collected on by creditors
• Reaffirmation of debt (Debts that you choose not to discharge)
• Voluntary repayment (Typically loans from family members or friends)

Hardship Discharge

If people who file for bankruptcy and have a repayment plan are not able to maintain those payments,  they may be able to file for a hardship discharge, which will discharge debts that are part of the repayment plan, although it does not apply to Chapter 7 non-dischargeable debts. Only the court can grant hardship discharges if the individual meets the following three conditions:

• Inability to pay due to circumstances beyond the control of the individual
• Hardship discharge cannot take place before the debtor has paid creditors the amount that would have been received from a Chapter 7 Bankruptcy
• It is not possible to modify the existing repayment plan to match the new financial circumstances

Contact a Long Island Bankruptcy Attorney at our firm for a free, confidential, no obligation consultation regarding your financial situation or call us at (631) 564-2754.