What Does It Mean To Have A Bankruptcy Discharge?

Posted: September 14, 2020 at 9:22 am

There are a lot of things that you have to learn when you decide bankruptcy is in your best interest, including what it means to have a bankruptcy discharge. If you’re not clear on the steps and how the process works it is easy to misunderstand where you really stand with your creditors and within the process. Once you have clarity about where you are and what it all means you are more able to proceed with confidence.

For you and your situation, a bankruptcy discharge is a good thing. It means that you have been in front of a judge who has given you the legal status you need. Once debts are discharged your life becomes less stressful.

With your discharge papers you have evidence that you are no longer pursued for money from the various creditors you owe, provided that they have been adequately added to the list prior to discharge and are part of the terms of the bankruptcy agreement.

There are all kinds of protections when your claim has reached discharge. This is when you free yourself from the fear of having any collateral or claims seized even if it was originally part of the agreement. A discharge creates a safety net for you.

This is also the time that you may find you have more freedom to get out of your financial turmoil as well. If you do things like get a new job, increase your income, or find that you are suddenly eligible for an inheritance discharged paperwork prevent your old creditors from coming back to you and deciding that you are to pay an old debt. This is why many people actually file for bankruptcy in the first place.

The process of filing for bankruptcy is not always an easy one. It isn’t supposed to be easy because the courts want to be sure that you actually can’t pay off the debts. This is different from choosing not to pay off the debts you owe. The lending system wouldn’t work too well if everyone could just file quickly and without much discord along the way.

You will find it literally impossible to find lenders if you have a bankruptcy in progress. Nobody wants to find their loan on your bankruptcy list. So the bankruptcy discharge papers actually have to be often in your hand before you can even apply for something like an auto loan or a mortgage.