Chapter 7 and Chapter 13 bankruptcies conclude with the bankruptcy court issuing a document called a “discharge order.” It’s a two-page document, an example of which can be found here [http://bklaw.com/bankruptcy-blog/wp-content/uploads/2011/09/discharge1.pdf]. To summarize, here are the things it does and does not say:
- It does not dismiss the case nor does it speak to how much the Trustee will pay to your creditors.
- It bars creditors from collecting on debts subject to the discharge unless the debts were not “avoided or eliminated” in bankruptcy.
- Debtors may pay discharged debts if they choose to.
- The debtor does not need to pay debts that existed at the time of filing or the time of conversion from a different chapter in the bankruptcy code.
- The discharge order lists 10 types of debts that are not discharged.
- It does not say which debts were discharged.
The sixth point is what throws many petitioners off. The court does not itemize the debts, the amounts, the creditors, and the specific dispositions of each debt. The bankruptcy judge merely signs the discharge order, which is filed with the case, and then the court sends it to parties. This vagueness can annoy debtors who want to experience the satisfaction of obtaining a legal document that they could, in theory, show a creditor if it initiated collection proceedings despite the discharge. More importantly, it creates problems for debtors who are anxious to know precisely which debts the bankruptcy court discharged. This is necessary knowledge because some debts may not have been discharged, others were exempt from bankruptcy, some may have been taken on after the petitioner filed bankruptcy, and still others may have been accidentally excluded from the petition altogether.
Why is this? Because bankruptcy courts are busy places, petitioners have all kinds of debts, and aside from those debts that are argued before the court, it’s a lot easier for bankruptcy courts to issue blanket discharge orders rather than require the clerks or one of the parties to draft a line-by-line schedule of the exact debts and attach it to the discharge order. As a result, debtors who want to know exactly which debts the discharge order applies to must consult their Las Vegas bankruptcy attorney.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation by calling 702-880-5554.