There is only one reason for filing for bankruptcy: to get your bankruptcy discharge. Your debts are officially wiped out by a discharge from bankruptcy.
That’s what “discharge” means: to eliminate your debts.
While the process is easy, there are some things you need to know.
Your Discharge Duties
You will only receive your discharge if you complete all of your duties, so it is critical that you understand what you are required to do before you start your bankruptcy. There’s no point in starting a process unless you are confident that you can meet all of your responsibilities.
Your responsibilities will include making a monthly payment to your trustee to cover the administrative costs of the bankruptcy, and perhaps an extra payment each month if you have surplus income. Be sure your trustee explains the costs to you before you file.
You are also required to send your trustee copies of your paystubs each month, and to attend two credit counselling sessions, and to perform other duties.
Can Creditors Object?
If you complete all of your duties on time, you will receive your discharge unless one of your creditors objects to your discharge. Why would a creditor object? It is very rare, but if they believe your behavior was not appropriate they could ask the bankruptcy judge to delay or not grant your discharge. This is very unusual, but if you have any concerns you should discuss them with your trustee.
Your Discharged; Now What?
Once you are officially discharged you begin your new, debt free, financial life. Think of how great it would be not to have to worry about juggling credit card payments every month!
You have a fresh start, so make the most of it. Start by saving money. By always having cash in the bank you will never again have any debt worries. When you have saved up enough for a “rainy day” fund, start saving for whatever is important to you. It could be retirement, a new car or house, or your children’s education.
The point is that with your bankruptcy discharge your life is now moving in a different, and better, direction. Instead of struggling to make your debt payments, you are now saving money for future purchases. It’s a great way to live, and being able to look to the future is the most important advantage of getting your bankruptcy discharge.