Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Are my 401k and IRA protected in bankruptcy?”
Though you might be considering filing for bankruptcy it’s possible that you do not yet understand all of the important aspects of the bankruptcy process. One of the most commonly used terms in a bankruptcy case is “discharge” and while you may have a vague idea of what it refers to, let’s delve into the topic and offer a more complete explanation of what exactly discharge means in the context of a North Carolina bankruptcy case.
What is a discharge?
A bankruptcy discharge releases debtors from liability for certain debts contained in their bankruptcy filing. This means that the debtor is no longer legally obligated to pay any debts that have been discharged. The discharge exists as an order from the bankruptcy court which legally prevents creditors from taking any action to collect debts that have been discharged. This means no phone calls, letters, lawsuits or any other action meant to elicit payment.
When does a discharge happen?
The answer to this question depends entirely on the specifics of your bankruptcy case. In Chapter 7 bankruptcies, the discharge is usually issued by the bankruptcy court upon the expiration of the deadline for creditors to object, usually 60 days after the meeting of the creditors. This usually happens about four months after the bankruptcy petition was initially filed with the bankruptcy court.
Chapter 13 cases are different and discharges are usually granted soon after the debtor completes the court-approved repayment plan. Since Chapter 13 cases can last between three and five years, the discharge usually occurs sometime after that.
Are all debts discharged?
Unfortunately, no. Not all debts are discharged, even in a bankruptcy. The debts that are usually dischargeable include consumer or business debts, things like credit cards, mortgages, car loans, medical debt, etc. There is a long list of other debts that are not dischargeable and this includes things such as child support arrearages, alimony debts, some court awards, debts to the government, back taxes and even student loans.
Can a discharge ever be revoked?
Yes, in some cases it is possible that a bankruptcy court can revoke a discharge. However, such an extreme response is incredibly rare. The law says that a discharge will only be revoked in cases where it is discovered that the debtors obtained the discharge through fraud, failed to disclose assets during the bankruptcy or committed other improper acts.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.