Q: What debts are discharged in a Chapter 7 Bankruptcy?
A. Upon successfully making all of your payments under a Chapter 13 Plan, you will receive a discharge from most of your debts. Basically, a discharge is the release of the debtor from the personal liability for the repayment of a debt. It does not release the debtor's property from the claim or right to possession of a valid security interest, lien or mortgage held by a creditor. Most common unsecured debts (credit card debt, medical bills, past due rent, personal loans, etc.) are discharged. The personal liability for repayment of most secured debts is discharged (but, again, not the lien or security interest in the property). Now, read "What debts are not discharged".
Q: What debts are not discharged in a Chapter 7 Bankruptcy?
A. There are two primary classifications of debts which are not discharged in a bankruptcy case. First, debts which are not discharged, and the creditor does not have to do anything to protect its interest. Second, debts which are discharged unless the creditor takes action(s) in the bankruptcy case to assert that the debt should not be discharged.
i. Non-dischargable Debts (Automatically are not discharged). The most common of these types of debts are child support and other domestic support obligations, student loans, and taxes for recent years. Debts which are not listed in the bankruptcy documents are also not discharged. (Note: You should consult an attorney concerning the potential for the discharge of tax debts.)
ii. Debts that are discharged unless the creditor takes Court action. If the creditor is notified, and does nothing, then the debt is included in the discharge of the debtor. The most common of these types of debt are:
- a. Debts incurred by fraud, false pretenses or false representation debtors' financial condition;
- b. Debts for the aggregate purchase of "luxury goods or services" from one creditor in excess of $500.00 within 90 days before filing;
- c. Debts cash advances or loans for more than $750.00 within 70 days before filing; and,
- d. Debts for willful or malicious acts.
Q: What is a "secured" debt?
A. A secured debt is a debt whose repayment is secured by a lien, claim or charge against property owned by the debtor. The lien, claim or charge may have arisen by agreement with the lender (examples: mortgage on your home, car title loan, purchase money security interest, etc.), or it may have been claimed involuntarily by the creditor pursuant to enforcement of a legal right (tax lien, mechanic's lien, judgment lien, etc.). Basically, if you do not pay, the creditor can take the property to satisfy its lien.
Q: What is an "unsecured" debt?
A. An unsecured debt is any debt whose repayment is based only on debtor's personal promise to repay. In bankruptcy, there are two primary types of unsecured debt. General unsecured debts are the most common, and usually arise from personal loans, credit cards, medical expenses, unpaid rent, claims for damages to person or property, student loans, and similar indebtedness. Priority unsecured debts are debts that are given special treatment in bankruptcy because of the nature of the debt. Typical examples of priority debts are tax debts, domestic support obligations, and some debts owed to
Q: What is a "stay" or "stay order" in Bankruptcy?
A. A "stay" is an order issued by the Bankruptcy Court basically requiring that all efforts to collect a debt or to enforce payment of debt be stopped pending the while the bankruptcy case is proceeding, or until the Bankruptcy Judge allows the collection effort to continue. On the filing of the Bankruptcy Petition, the Court will automatically issue a stay order unless the case was previously dismissed for certain causes or under certain circumstances. The stay order requires that creditors stop calling, harassing or writing you, and that most civil judicial proceedings cease.
Q: Will filing a Chapter 13 stop a foreclosure of my house?
A. Yes, if a stay order has been issued and is in effect in your case (see above). In Georgia, almost all foreclosures of residential real property are done by a non-judicial sale of the house under a power of attorney contained in the Deed to Secure Debt. The mortgage company and its attorney must stop any efforts to collect the debt, and this includes foreclosure by sale of the house under a non-judicial power of attorney contained in a Deed to Secure Debt. Georgia foreclosure sales are held on the first Tuesday of each month at the county courthouse.
Q: Can I keep my house?
A. Yes. You may be able to keep your residence. However, you must be able to make your post-filing payments on a timely basis, and you must pay-off the past due payments as part of your Plan.
NOTICE: The services or benefits offered are bankruptcy relief under the provisions of the U.S. Bankruptcy Code. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
