How to Get Rid of Debt With Chapter 7 Bankruptcy Laws

A debtor filing for chapter 7 bankruptcy finds that lots more debts are discharged under the chapter 7 bankruptcy laws than filing any other types of bankruptcy. Most of the debts can be discharged under the chapter 7 bankruptcy laws but there are exceptions. Creditors are also restricted in their collection actions against debtors who file chapter 7 bankruptcy.

Compliance is key when filing chapter 7 bankruptcy. A debtor must comply with chapter 7 bankruptcy laws in order to not have his or her case rejected, converted or dismissed. To comply with the chapter 7 laws, a debtor often hires a bankruptcy lawyer to help with filing and interpreting the complicated laws.

Under the chapter 7 bankruptcy laws, creditors can file complaints and object against the discharge of their debts. If creditors do not object, the bankruptcy court will issue a discharge order based on the types of debts. The court often acts fast and a discharge order could be received only a few months after the first meeting of creditors.

Most people who file chapter 7 bankruptcy receive a discharge order however there are many reasons the court may reject the case. For example, if a debtor takes advantage of the chapter 7 bankruptcy laws such as committed a crime, fraudulently transferred assets to deceive the bankruptcy court, sabotaged properties that would be liquidated then the court would reject the case.

Even after the discharge order has been granted, secured creditors can still attempt to collect the assets used as collaterals for the debts. If a debtor does not want to give the asset back to the secured creditor, he or she can reaffirm the debt, pay the secured creditor and keep the asset even after the bankruptcy ruling.

Creditors are forbidden to harass the debtors once a discharge order has been granted. Secured creditors can collect the debts but unsecured creditors must stop all legal actions and harassment. If the debt has been sold to collection agencies, them too must stop all collection efforts after bankruptcy.

While many debts are discharged under the chapter 7 bankruptcy laws, many debts are not. If a debtor’s main debts are those exempt from discharge, then he or she will still owe the debts after the case is closed. Examples of debts not discharged according to the chapter 7 bankruptcy laws are alimony, child support, taxes, and guaranteed loans. There are many more exceptions.

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