When filing for bankruptcy, the goal is to release the debtor from personal liability for certain specified types of debts. This means that legally you will no longer be required to pay for certain debts and you will receive a bankruptcy discharge. The discharge comes at the conclusion of your bankruptcy case and is in the form of a permanent court order signed by the bankruptcy judge assigned to your case. The Federal Rules of Bankruptcy Procedure provide for the clerk of the bankruptcy court to mail a copy of the order of discharge to all of your creditors, the U.S. trustee, the trustee in your case, and the your bankruptcy attorney. The permanent discharge order will prohibit your creditors from taking any form of collection action against you including phone calls, letters, legal activity, and personal contact. They will also be cautioned in the discharge notice that not adhering to the terms and conditions of the bankruptcy discharge may mean that they will be found in contempt of court and ordered to pay a fine.
In Florida, debtors do not have an absolute right to discharge as a grant of discharge is subject to court review based on all creditor objections filed. Depending upon personal assets, liabilities, and financial history, all benefits may not be available. The court must resolve creditor objections before a discharge is granted and creditors are assigned the “burden of proof”. Creditors must also meet deadlines and if motions or complaints are delinquent, confusing, or unconvincing, relief requested by the debtor will precede the objections.
Specific reasons that support a creditor’s motion to deny discharge include:
- Purchases of more than $1,000 in luxury goods or services from a single creditor within 60 days of filing
- Certain taxes and fines
- Student loans unless repayment would cause undue hardship
- Debts incurred through fraudulent conduct
- Debts not listed in your bankruptcy petition
- Liability incorrectly identified in the list of creditors or schedules
- Fines and restitution to crime victims
- Fees imposed by courts cannot be discharged in Florida bankruptcy
- Undeclared federal, state, and local taxes
- Credit card payments for taxes cannot be discharged in Florida bankruptcy
- Alimony, child support payments, and certain other related debts arising out of a divorce decree or separation agreement
- Fines and judgments resulting from DWI, DUI, or intoxication
- Debts caused by a death or personal injury related to your operation of a motor vehicle while intoxicated
- Liabilities deemed non-dischargeable in previous bankruptcies due to fraud or malfeasance
Even though a debtor is no longer personally responsible for discharged debts, a creditor may have the right to take property secured by a valid lien. A lien is a legal claim or a “hold” on some type of property making it collateral against money or services owed to another entity. Liens usually exist as second mortgages, loans against vehicle titles, or money loaned against other items owned by the borrowers. This claim keeps a borrower from selling property, or at least prevents the transferring of title to the property until the debt or obligation is satisfied. If the loan is in default, property that carries a lien can be forced into sale by the lender to collect what is owed. If the borrower decides to sell the property, the lienholder must be paid before the title will be cleared and in some cases, the lienholder is permitted to take possession of the property until the debt or obligation is satisfied. As an example, a creditor may hold a lien on a vehicle after a bankruptcy discharge and if the debtor does not pay the car loan, the creditor may have the right to repossess the vehicle. The creditor is not allowed however to pursue any collection action including calling the debtor to demand payment or sending a payment demand letter.
The most successful solution to your bankruptcy is to retain a Florida bankruptcy attorney who will plan your case well in advance and Attorney Robert Pflueger has over 30 years practicing bankruptcy law in Central Florida. As with many areas of bankruptcy, regarding the scope of discharge bankruptcy law is complex and you should set up a consultation with Robert Pflueger prior to filing your claim. With his qualifications and expertise, you have a much better chance of receiving your bankruptcy discharge without question. Your Discharge Order is a crucial and important document because it proves that you completed your bankruptcy case and that you are entitled to a fresh start. Your bankruptcy discharge is the final stage in the process of bankruptcy and it is required to eliminate your debts so for more information, please call Orlando Bankruptcy today.