What does discharge of debt mean in bankruptcy?
When the Sacramento Bankruptcy Court or Modesto Bankruptcy Court grants you a discharge, it means that your creditors cannot collect your debt from you personally. Once you received a bankruptcy discharge, your creditors have to stop wage garnishment, bank levy, phone calls, threatening letters, lawsuits and other attempts to collect on the discharged debts.
However, there are debts that are nondischargeable like child support, alimony, student loans (if you cannot prove “undue burden”), recent taxes, intentional torts, damages caused by DUI, debt due to fraud, etc.
A discharge does not eliminate car loan or mortgages if you plan to keep the collateral. However, if you qualify, a Chapter 13 Bankruptcy lienstrip can remove second mortgages or equity line of credit or a Chapter 13 Bankruptcy can cram down or reduce the balance owed to your car loan to the retail value of your car.
For more information on the type of debts are dischargeable, call Sacramento Bankruptcy Attorney Muoi Chea with Bankruptcy Office locations in Sacramento, Stockton, and Fairfield, California to serve residents of Northern and Central California.