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.
The chapter 7 bankruptcy laws are complicated because there are many exceptions so many people seek the help of a bankruptcy attorney. A bankruptcy attorney can help the debtor file chapter 7 bankruptcy correctly and comply with the necessary laws. If a filer fails to comply with the chapter 7 bankruptcy laws, the case can be dismissed, rejected or converted to another type of bankruptcy filing.
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 people who file chapter 7 bankruptcy receive a discharge order however there are many reasons the court may reject the case. For example, if a debtor takes advantage of the chapter 7 bankruptcy laws such as committed a crime, fraudulently transferred assets to deceive the bankruptcy court, sabotaged properties that would be liquidated then the court would reject the case.
If the debtor has secured debts, secured by properties such as a house or a motorcycle, then the creditors of secured debts can still claim the assets that were used as collaterals for the debts even after the discharge order has been issued. If a debtor wants to keep the assets that were used as collaterals, according to the chapter 7 bankruptcy laws, the debtor can reaffirm the debts to keep the assets.
Once a discharge of debts has been granted to the chapter 7 filer, creditors of discharged debts may not continue to harass the debtor in order to collect the debts. Creditors that sell off the debts to collection agencies cannot themselves contact the debtors to collect the debt. The collection agency also cannot keep trying to collect from the debtor.
While many debts are discharged under the chapter 7 bankruptcy laws, many debts are not. If a debtor’s main debts are those exempt from discharge, then he or she will still owe the debts after the case is closed. Examples of debts not discharged according to the chapter 7 bankruptcy laws are alimony, child support, taxes, and guaranteed loans. There are many more exceptions.