A bankruptcy discharge permanently enjoins creditors from all attempts to collect discharged prepetition debt after the discharge is entered. A bankruptcy discharge will be granted or denied pursuant to Section 727 or 1328 of the US Bankruptcy Code, depending on the chapter in which the case is filed.
Even if the debtor receives a general discharge, certain debts may be excluded from that discharge. Section 523 of the Code lists the types of debts that may be excepted from discharge. A distinguish must be made between "domestic support obligations" on one hand and "property settlement obligations" on the other hand. First, debts for "domestic support obligations" (fka alimony, maintenance and support) are nondischargeable in every kind of bankruptcy case.
Second, under the 2005 bankruptcy amendments, property settlement obligations may be dischargeable in chapter 13 cases, but not in chapter 7 cases. Under prior law, property settlement debts could sometimes be discharged in chapter 7 if the debtor was unable to pay or if the benefit to the debtor of discharging the debt outweighted the harm discharge would impose on the former spouse. Thus, this balancing test has now been legislated out of the bankruptcy Code. Source: American Bankruptcy Institute
Warmest Regards,
Bob Schaller
Your Bankruptcy Advisor Blog
By: Attorney Robert Schaller (Bob's bio) of the Schaller Law Firm
Bob is a member of the National Bankruptcy College Attorney Network, American Bankruptcy Institute and the National Association of Consumer Bankruptcy Attorneys.
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Monday, September 21, 2009
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