When are debts discharged in bankruptcy?

Aside from wondering what kind of bankruptcy is right for them and whether their debts can be discharged in their proceedings, Arizona clients usually want to know how soon their debts can be discharged. This article will discuss the answer to this question in a little bit more detail so prospective bankruptcy filers can get a feel for timing in their bankruptcy process.

First, let's consider Chapter 7. In Chapter 7 proceedings, the discharge happens the fastest. The court typically grants the discharge at the deadline for filing a complaint that objects to the discharge, and at the deadline for filing a motion to dismiss for substantial abuse, which is 60 days after the first creditor's meeting. This happens approximately four months following the date of filing of the petition.

Second, let's look at Chapter 13. In Chapter 13 proceedings, borrowers need to make monthly payments to pay off their bankruptcy over a period of three to four years. Depending on the length of the payoff plan, the bankruptcy discharge could happen after about three to five years. In most Chapter 13 proceedings, the discharge is granted after the filer has satisfied all of his or her bankruptcy plan payments.

All this said, if an Arizona resident fails to complete his or her required instructional course about financial management, the bankruptcy court can choose to deny the individual's discharge. In certain rare circumstances, individuals may be able to request an exemption on this requirement.

Bankruptcy is not an easy process to go through, but an attorney can be very helpful in assisting Arizona residents in carrying out this process. Bankruptcy filers can rest assured that once the filing process is complete, they can enjoy a renewed financial prosperity and a better economic life.

Source: FindLaw, "The Debt Discharge in Bankruptcy FAQ," accessed June 10, 2016

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