Chapter 7 Discharge

After the Creditors Meeting, there is a 60-day period during which time creditors can file claims if they believe you have non-exempt assets and during which time creditors may also object to being discharged provided they have legal grounds. Grounds for objection to discharge include fraud. Student loans, ineligible income tax debts, alimony, and support obligations are most likely not dischargeable.

A minimum of 60 days (usually more) following the creditors meeting you should receive a copy of a court order that discharges your debts. The discharge order wipes out your dischargeable debts to creditors in your bankruptcy. Do not expect to receive your discharge immediately after 60 days. You can call the Bankruptcy Voice Case Information System at (866) 879-1286 for an update on your case.

The entry of a discharge order does not affect a secured creditor’s rights in property which you pledged to repay the secured creditor. The secured creditor can always repossess the secured property if you do not pay according to your loan agreement. In addition, the discharge order only discharges debts that “are dischargeable.” Therefore, the order does not eliminate non-dischargeable debts, such as student loans, ineligible tax liability, or loans procured by fraud or by abuse of the bankruptcy system. The Order of Discharge does not give you a list of specific debts that were discharged; it simply states that dischargeable debts are discharged.

The Bankruptcy Code has a list of debts which cannot be discharged in Chapter 7 bankruptcy. These non-dischargeable debts include:

  • Debts incurred through fraud or embezzlement;
  • Recent income tax liability;
  • Education loans / student loans;
  • Fines and penalties payable to the government;
  • Child support, alimony, and property settlement obligations;
  • Debts incurred for the purchase of luxury goods.

There is a presumption of non-dischargeability for cash advances of over $750 taken within seventy (70) days of filing and for purchase of more than $500 within ninety (90) days of filing.

Presuming you did not have non-exempt assets, approximately 30 to 45 days after the Discharge, you will receive another Order stating that your case is closed. This means that your bankruptcy case is over.

It is illegal for your current employer to discriminate against you in any way because you filed bankruptcy. A private employer may refuse legally to hire people who have filed bankruptcy. Government employers may not discriminate against bankruptcy debtors in hiring.

Jon Alper

About Jon Alper

Jon is an attorney focusing on bankruptcy and asset protection in Orlando, Florida.