What Does It Mean to “Discharge” Debts Through Bankruptcy in Nevada?
Like many in Nevada struggling with unmanageable amounts of debt, you may have heard about the “fresh start” bankruptcy provides by “discharging” debts. But what does it mean if a debt is “discharged?” Do you never need to worry about the debt again? Are only certain debts dischargeable? These are questions an experienced bankruptcy lawyer can answer.
Not All Discharges Are the Same
You might be surprised to learn that the term “discharge” is not defined by the Bankruptcy Code. This is because “discharge” means different things depending on the type, or chapter, of bankruptcy you file. For example, the discharge in chapter 13 is often called a “super discharge” because it is broader than the discharge in chapter 7. That being said, a bankruptcy discharge is essentially the termination of legal liability for a debt. Once a debt is discharged, you are no longer personally responsible for paying it.
The Discharge Order
If you successfully navigate the bankruptcy process, the court will enter an “Order of Discharge.” This court order explains the full details of your discharge and can be used to show you are no longer liable for discharged debts. Creditors can’t attempt to collect discharged debts. They must simply walk away.
Certain Liens Survive Discharge
A discharge eliminates personal liability for debts. For debts like credit cards and medical bills that you only have personal liability for, a discharge leaves nothing left for creditors to enforce. Debts that are “secured” by a lien against property, like a car or home, are different. A discharge generally won’t extinguish liens against property, meaning creditors with liens can still enforce against the property itself. This doesn’t mean you’ll lose everything with a lien against it. Most people are able to keep their homes and vehicles, even though there may be liens against them. You should discuss liens with your bankruptcy attorney to explore all available options.
Not All Debts Can Be Discharged
Generally speaking, if a debt stems from wrongdoing, it probably can’t be discharged. Common examples are restitution owed from a criminal conviction, or debts relating to the injury or death of another caused by operating a vehicle while under the influence. Other nondischargeable debts typically include child support and alimony obligations, or unpaid taxes, fines, and penalties owed to the government. For a full list of debts that might not be discharged in bankruptcy, consider speaking with an attorney.
Discharges Can Be Revoked
The function of a discharge is to “wipe the slate clean.” For most people the discharge is permanent, but bankruptcy courts have the power to “revoke” a discharge and make you liable for your debts again. If the court learns that you tried to conceal assets, failed to cooperate or obey court orders, or acted fraudulently during bankruptcy, your discharge can be revoked. It is important that you answer questions carefully and make full and complete disclosures before and during the bankruptcy process, as a single mistake can potentially cause your discharge to be revoked.
How Can a Las Vegas Bankruptcy Lawyer Help?
An experienced bankruptcy attorney in Las Vegas can analyze your situation and explain which debts can or can’t be discharged. A discharge is the primary goal of bankruptcy, since it eliminates personal liability for debts, but care must be taken to ensure creditors can’t seize assets after the bankruptcy process is done. With the right guidance, you can start fresh with a clean slate. Contact Larson & Zirzow today to learn more.
Source:
uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/discharge-bankruptcy-bankruptcy-basics