Filing for bankruptcy is often the final resort to addressing overwhelming debt. In Chapter 7 cases, debtors can find help organizing their assets and relieving specific loan types based on their circumstances. This option can also help them receive discharge releases when appropriate.
Seeking discharge for different debt types can help debtors relieve pressure from their financial obligations. Once discharged, they are no longer liable for the eligible debt types, allowing them to organize their remaining loans, resolve them and start fresh. However, some factors can affect a debtor’s ability to seek discharge opportunities. The court may deny a discharge based on the following:
- The debtor provided insufficient records and documents.
- They had inadequate explanations for their asset losses.
- The filing party committed offenses or misconduct concerning the bankruptcy process.
- The debtor violated an order issued by the bankruptcy court.
- The debtor committed fraudulent activities to manipulate property details or destroy assets.
- The debtor did not comply by failing to finish an approved financial management course or program.
Aside from seeking discharge, debtors can request other arrangements that can let them keep specific property types. Still, these options may only apply from case to case. Eligibility can heavily depend on the debtor’s circumstances and the repayment setup with their creditors.
Navigating the bankruptcy process
When filing for Chapter 7 bankruptcy, the process can be challenging to understand. Two debtors in similar situations may file for the same bankruptcy type, leading to different outcomes.
Sometimes, seeking legal counsel is necessary, especially if the debtor intends to use options to reaffirm assets and ask for discharge. There is no guarantee that they will get the results they want, but having adequate legal guidance can help them navigate the process and know the effects of their arrangements.