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Texas Bankruptcy Lawyers - "What is a discharge in bankruptcy?"
Under 11 U.S.C. 727, a discharge is a release of
liability in favor of the debtor applies only to specific debts appearing within schedules filed with the
court. Debts that must be listed within schedules include
many common consumer obligations: loans, notes, credit cards, accounts payable,
and contractual obligations. Lawyers must include all debts disclosed by clients. Thereafter, a discharge terminates obligations
unless subject to a specific exception. Once discharged, no further
payment are required as if the debt did not exist.
An order of the court granting discharge acts as a federal
injunction directed to each listed creditor, prohibiting further action to
collect the debt, claiming the debt, or representing to any person or organization that
the debt remains valid. Lawsuits are banned. All actions for collection are prohibited, including all phone calls
requesting payments of any kind. Lawyers frequently file motions for violations of prohibited collection
efforts.
Texas Bankruptcy Lawyers & Collateral
Be aware that debts secured by valid liens on collateral are not fully
discharged in a Texas bankruptcy. Creditors and their lawyers retain rights to recover collateral, up to the value of the
lien, but may not collect any amount owed beyond the lien value. In the most basic
sense, a bankruptcy discharge charges off only unsecured obligations, including
the unsecured portion of debts secured by collateral. Debtors may selectively choose to repay any debt after discharge. Post
discharge payments are voluntary. A post-discharge payment of a portion of a discharged debt, if made, does not
act as a reaffirmation of the debt and no further payments are required.
All debtors and their attorneys have questions about current laws.
Board certified consumer bankruptcy specialists in Texas refer to the
Code regularly, as well as review slip opinions of new case decisions as
they become available. The process is organic, in that the law,
benefits, rights and duties of debtors changes in response to the
current political environment, and in turn, require a constantly
changing approach in court to gain favor. Also be aware, each debtor and
their attorney are responsible for legal compliance with all Texas
bankruptcy laws regardless of actual knowledge of recent changes. For
this reason, debtors filing pro se seldom achieve the results as
favorable as debtors who are represented by a qualified consumer
specialists who is familiar with current changes and requirements.
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