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.