What is a Discharge in Bankruptcy?
The purpose of bankruptcy is to get discharge of debts in a straight or chapter 7 bankruptcies. To get discharge, a borrower must get a financial certificate instructional course offered by an approved provider. These counseling instruction classes can be conducted in person, over the phone or via the internet. The law office of Malik Ahmad provides such links to the counseling certificates and these classes can be finished mostly in less than 2 hours. There is wealth of information in these classes about financial management. Under the new bankruptcy laws, the debtor must file a statement certifying completion of the course within forty-five days after the first date set for the meeting of creditors. The pre bankruptcy course must be taken within 180 days of the date of filing of bankruptcy.
Going back to discharge, the discharge is effective to all the debts However; there are many things on which the discharge is not applicable. That includes government taxes, fines, student loans, child support arrearages, or the debts which were not listed in the schedules. Other exception includes federal criminal restitution debts, debts incurred to pay nondischargeable taxes, marital property settlement debts, certain condominium, homeowners association and cooperative fees. Certain court fees and costs owed by prisoners and debts for repayment of loans from pension plans.
Again, in cases where the debtor wishes to reaffirm a debt and the debtor was not represented by an attorney in negotiating the reaffirmation agreement, the court is required to hold a discharge hearing. Because of the strong public policy against reaffirmation agreements, the Code requires a careful explanation of reaffirmation to the debtor by the court at the discharge hearing, or by an attorney of the debtor. It should be fully supported in a court that a reaffirmation is fully understood by the debtors; it is voluntary and does not impose undue hardship. In addition, the court also reviews the reaffirmation agreement for its satisfaction that it is not unduly harsh upon the debtor and his/her dependants and also it is in the best interest of the debtor. Unless new property comes into the estate within 180 days of the filing of the original petition, there is nothing further to be done by the court and the case is closed.