THE HOW OF A CHAPTER 7 BANKRUPTCY DISCHARGE
Your Chapter 7 Discharge releases you, as a debtor, from personal liability for all the debts you included in your Nevada Bankruptcy Petition and that were approved by the Bankruptcy Court. It also prevents the creditors to whom those debts were owed from taking any collection actions against you, the debtor. Please note that there are exceptions to this rule. Generally, individual debtors receive a discharge in more than 99 percent of chapter 7 cases. In most cases, (unless a party in interest files a complaint objecting to the discharge or a motion to extend the time to object), the Nevada Bankruptcy Court issues a discharge relatively early in the case – generally, 60 to 90 days after the date first set for the meeting of creditors. Fed. R. Bankr. P. 4004(c). The Nevada Bankruptcy Court may deny a Chapter 7 bankruptcy for the following reasons:
- debtor failed to keep or produce adequate books or financial records
- failed to explain satisfactorily any loss of assets
- committed a bankruptcy crime such as perjury
- failed to obey a lawful order of the bankruptcy court
- fraudulently transferred, concealed, or destroyed property that would have become property of the estate
- failed to complete an approved instructional course concerning financial management. 11 U.S.C. § 727; Fed. R. Bankr. P. 4005.
Secured creditors may still have the right to seize property securing an underlying debt even after a discharge is granted, such as a vehicle for which you have not reaffirmed the debt. If you decide to reaffirm a debt, such as for your vehicle, you must do so before the discharge is entered. This basically involves you signing a written reaffirmation agreement (means you agree to keep paying on this particular debts, such as your vehicle) and filing it with the court. 11 U.S.C. § 524(c). Reaffirmation agreements must contain an extensive set of disclosures described in 11 U.S.C. § 524(k). These disclosures must advise the debtor of the amount of the debt being reaffirmed, and how it is calculated. It must also state that you, the debtor’s, personal liability for a certain debt will not be discharged in the bankruptcy. The disclosures must also show that the balance of income to paying expenses is sufficient to pay the reaffirmed debt. Contact us if you need more details and help regarding reaffirmation. The Bankruptcy Court may revoke a chapter 7 discharge on the request of the trustee, a creditor, or the U.S. trustee if:
- the discharge was obtained through fraud by the debtor
- the debtor acquired property that is property of the estate and knowingly and fraudulently failed to report the acquisition of such property or to surrender the property to the trustee
- you (without a satisfactory explanation) make a material misstatement or you fail to provide documents or other information in connection with an audit of the debtor’s case. 11 U.S.C. § 727(d).
Debts NOT eliminated by a Chapter 7 Bankruptcy Petition
- Student loans, except hardship cases
- Debts of most taxes owed
- Alimony, maintenance, and child support
- Debts of fines, penalties or criminal restitution
- Debts owed for personal injuries caused by driving while under the influence of alcohol or drugs
- Debts not listed on bankruptcy petition
10 Easy Steps to a Chapter 7 “Fresh Start” Bankruptcy
1. Gather list of debts
2. Email to us or bring to our office
3. We prepare your Nevada Bankruptcy Petition
4. You attend pre-filing Credit Counseling
5. You come to our office and sign your Nevada Bankruptcy Petition
6. We file your Nevada Bankruptcy Petition
7. You attend a Creditor Meeting with your attorney
8. You attend the pre-discharge Debtor Education class
9. You follow your Chapter 13 bankruptcy repayment plan
10. Your bankruptcy gets discharged
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