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"This Is All We Do and We Do It Well."
Overwhelmed, stressed debtors tend to hear many catch phrases swirling around as they investigate ways to deal with out-of-control debt. Some of those phrases are:
- Credit counseling
- Debt resettlement
- Debt consolidation
- Debt reorganization
Some of these debt solutions may be able to help debtors avoid bankruptcy altogether or at least for awhile. However, if debt is truly excessive, the only long-term solution may be bankruptcy and debt discharge.
Debt Discharge Brings True Debt Relief
The most favorable outcome for a struggling debtor is the discharge or elimination of debt. Burdened debtors find real debt relief and get a fresh start when debts they cannot repay are wiped out completely. This is the essence of a successful Chapter 7 and the power of law behind a bankruptcy; allowable debts included in a Chapter 7 bankruptcy filing cease to exist when they are discharged at the conclusion of the case. The bankruptcy court informs creditors that if they seek to collect on debts that have been discharged, they may be held liable to pay penalties and attorney's fees to the debtor.
Chapter 13 bankruptcies may also end with a discharge of remaining debt after a debtor has repaid some of the debt over a three-to-five-year period.
How Will Debt Discharge Affect Future Credit?
Some people are worried about how debt discharge will affect their ability to obtain credit in the future. In fact, a "bankruptcy" notification may remain on one's credit report for up to 10 years afterward. However, most successful Chapter 7 bankruptcy filers find that lenders extend credit to them once again within a few months to a couple of years after a Chapter 7 discharge. These time periods vary greatly relative to the economy, lenders' policies, and the credit markets. For one thing, creditors know that a person who has filed Chapter 7 bankruptcy will not be able to do so again for eight years. Another reason may be that the elimination of all the competing debts on a debtor's plate makes many creditors want to be first in line to gain a foothold in an individual's renewed credit picture after a bankruptcy.
Prescott & Pearson, P.A., can help you prepare for bankruptcy efficiently by helping you determine which of your debts are dischargeable. Contact us to learn how we can be of assistance in your pursuit of debt relief through Chapter 7 or Chapter 13 bankruptcy.
Understanding Bankruptcy Laws · What Is Debt Discharge and What Can It Mean to You? Contact a St. Paul-Minneapolis Bankruptcy Lawyer
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- Minneapolis-St. Paul Area: 651-968-8096
- Minnesota Toll-Free: 888-366-0827
To learn more about debt discharge in a Chapter 7 or Chapter 13 bankruptcy, call or contact Prescott & Pearson, P.A., today. We offer free initial consultations, quality services at competitive rates and effective representation statewide.
