Bankruptcy lawyers in Detroit & Southeastern MI
The Bankruptcy Code is consistent throughout the United States. This is a federal code and applies to Detroit and the Tri-County Area residents and businesses.
Bankruptcy lawyers - What is bankruptcy discharge?
A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. The discharge is a permanent order prohibiting the creditors from taking any collection action on discharged debts. This includes legal action and communications with the debtor such as telephone calls, letters, and personal contacts.
When you have personal liability for a debt, a creditor with a judgment can use legal processes, (levy, lein, garnishment, etc.) to reach your non-exempt assets and earnings—even when those assets were not pledged as collateral and the debt was unsecured. Bankruptcy lawyers in Detroit can eliminate your personal liability for a discharged debt.
Are all of the debtor's debts discharged?
The debts discharged vary under each chapter of the Bankruptcy Code. Not all debts are discharged. The code specifically accepts various categories of debts from the discharge granted to individual debtors. The debtor must still repay those debts after bankruptcy. There are 19 categories of debt excepted from discharge under Chapters 7, 11, and 13. A more limited list of exceptions applies to cases under Chapter 13. The most common types of non-dischargeable debts are
- Certain types of tax claims
- Debts not set forth by the debtor on the lists and schedules the debtor must file with the court
- Debts for spousal or child support or alimony
- Debts for willful and malicious injuries to person or property
- Debts to governmental units for fines and penalties
- Debts for most government funded or guaranteed educational loans or benefit overpayments
- Debts for personal injury caused by the debtor's operation of a motor vehicle while intoxicated
- Debts owed to certain tax-advantaged retirement plans
- Debts for certain condominium or cooperative housing fees
Liens may also remain. A valid lien (a charge on property to secure a debt's payment) that was not made unenforceable (avoided) ) in the bankruptcy case can remain after the bankruptcy case. A creditor may enforce the lien to recover the property secured by the lien. Even when personal liability is discharged, most liens remain unaffected during and after the Detroit bankruptcy filing process unless modified or voided by a court order. Though a lien may remain a charge on a debtor's asset the debtor that debt cannot become a lien on any assets that the debtor acquired after the bankruptcy discharge.
File Bankruptcy in Detroit & Southeastern Michigan's - Timeline of bankruptcy discharge
The timing of the discharge varies, depending on which type of bankruptcy is filed. In a Detroit Chapter 7 (liquidation) case, for example, the court usually grants the discharge after a defined period of time. This is usually after the time for filing an objection to the discharge or motion to dismiss has expired (60 days after the first date set for the 341 meeting).
Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In individual Chapter 11 cases, and in cases under Chapters 12 and 13, the court generally grants the discharge as soon as practical after the debtor completes all payments under the plan. Since a Chapter 12 or Chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing.
Bankruptcy lawyer in Detroit, Victor Valentino on a creditor ignoring a discharge?
When your discharge rights are being violated, it is wise to take some type of protective action and call a bankruptcy lawyer in Detroit. Most abuses can be quickly stopped with a simple letter or phone call from a lawyer. Some recalcitrant creditors will nevertheless ignore the discharge as well as subsequent warnings from the bankruptcy lawyer, and engage in outrageous conduct, requiring court intervention to finally protect the debtor.
Any creditor who violates this court order may be held in contempt of court and may be liable to the debtor in damages. If a creditor later attempts to collect a discharged debt, the debtor should give the creditor a copy of the discharge and inform the creditor in writing that the debt has been discharged under Chapter 7. If the creditor persists, the debtor should contact a lawyer. If a creditor files a lawsuit against the debtor on a discharged debt, it is important not to ignore the matter, because even though a judgment entered against the debtor on a discharged debt can later be voided, voiding the judgment may require the services of a bankruptcy attorney in Detroit or the surrounding area, which could be costly to the debtor.
Detroit Personal Bankruptcy & Pontiac General Practice Law Firm
Lawyer Victor P. Valentino and his experienced legal staff provide thorough, effective legal assistance with civil litigation, workers compensation, bankruptcy, personal injury and insurance law to residents of the Detroit Tri-County area. With offices located in Bloomfield Hills, he is well-positioned to assist clients in Wayne, Oakland, Macomb and Genesee Counties, including the Bloomfield, Pontiac, Waterford, Clarkston and White Lake areas.
We understand that the bankruptcy process can be confusing, and that is why we are here to help.
To arrange your free consultation with a bankruptcy lawyer in Detroit, contact the Valentino Law Firm in Metro Detroit at 248-334-5340.
