What Do I Do if
Respecting My Discharge?
According to a report on bankruptcy filing trends from American Bankruptcy Institute, there were 26,723 business and non‐business bankruptcy filings in Texas in 2020. Filing for Chapter 7 or Chapter 13 bankruptcy can help you get financial relief when overwhelmed with debt, with all qualifying debts being discharged. Once your debts are discharged by the court, it means you will not have to repay them, and the lender can't make any attempt to collect such debts. Unfortunately, some creditors may fail to honor your debt discharge.
If you have filed for bankruptcy but a creditor isn't respecting your debt discharge, consulting with an experienced Texas bankruptcy attorney is important for detailed guidance. At Oliva Law Bankruptcy, we are dedicated to offering knowledgeable legal guidance and advocacy to clients in bankruptcy-related matters. Wel fight diligently to protect your legal rights, handle any ongoing creditor harassment, limit further communication with the creditor, and take appropriate legal action. Our firm proudly serves consumers across McAllen, Corpus Christi, Brownsville, and throughout the Rio Grande Valley of Texas.
Understanding Debt Discharge
Debt discharge is the cancellation of a person's debt due to bankruptcy. At the end of your bankruptcy case, the court will discharge all qualifying debts (or “dischargeable” debts), including personal loans, credit card balances, past-due utility bills, and medical debts. Once a debt has been discharged, you're no longer required to pay it. Likewise, the lender or creditor is no longer allowed to make any attempt to recover the debt.
When Does Debt Discharge Occur?
Furthermore, only "pre-petition” debts are eligible for discharge. These are debts that existed before you filed for bankruptcy. The debt discharge will occur when a debtor qualifies through bankruptcy court.
- In Chapter 7, your debts are usually discharged about four months after filing your bankruptcy petition.
- In Chapter 13, your remaining debts are discharged at the end of your repayment plan, usually within three to five years.
How Do Creditors Receive Notice Of Discharge?
Under the Federal Rules of Bankruptcy Procedure, the clerk of the bankruptcy court must send a copy of the final order of discharge to all creditors, the trustee in the case, the U.S. trustee, the trustee's attorney, the debtor, and the debtor's attorney.
Creditor Objections to Discharge
After your initial hearing, interested parties, including creditors or the trustee, can still object to your bankruptcy discharge. The creditor may file an objection to the debtor's discharge or a complaint in the bankruptcy court within 60 days of your meeting of creditors.
Reasons for Creditor Objection
Most objections to the bankrupt discharge involve:
- Debts incurred immediately before filing for bankruptcy
- Debts obtained through misrepresentation
- Debts obtained through fraud
In order to object to a debt discharge, a creditor must file an "adversary proceeding" (a lawsuit) in court, seeking to have the court determine the debt as nondischargeable. The creditor must also show why the court shouldn't discharge the debt.
What Happens When After an Objection?
After the creditor has filed the adversary proceeding, you will be allowed to respond to it. The case will go through the discovery process. Both the creditor and the debtor will have the opportunity to argue their case and present evidence. An experienced attorney can present your case diligently and improve your chances of reaching a favorable outcome.
When Creditors Still Attempt to Collect
Debt collectors are legally prohibited from collecting debts that were discharged in a bankruptcy case. If the creditor tries to contact you repeatedly after your bankruptcy discharge, document the creditor's contact information and report it to your legal counsel immediately. Your bankruptcy attorney will protect your rights and take appropriate legal action against the non-compliant creditor.
Turn to Our Experienced Team for Help
The laws and procedures regarding debt discharge, creditor objections to discharge, and adversary proceedings involve several complexities. Trying to navigate such bankruptcy issues without detailed guidance can present a lot of challenges. If the creditor isn't honoring your debt discharge or if you are facing an objection to discharge, you need to speak with an experienced bankruptcy attorney immediately to review your options and determine the best course of action.
At Oliva Law Bankruptcy, we are committed to handling bankruptcy cases and protecting clients in extreme cases involving creditor harassment. As your legal counsel, we will review the details of your case and explore your possible legal options. We will fight vigorously to protect your right to a fresh start, handle ongoing creditor harassment, and take legal action for a creditor violation.
Contact us at Oliva Law Bankruptcy today to schedule a consultation with experienced bankruptcy attorneys. Our team will offer you the comprehensive legal guidance and advocacy you need to navigate important decisions in your bankruptcy case. We proudly serve clients in McAllen, Corpus Christi, Brownsville, & throughout the Rio Grande Valley.