Discharge

Discharge is bankruptcy term of art the describes the final action in a bankruptcy case. Once the case has been properly administered, the individual who filed for bankruptcy is granted a discharge of the unsecured debt that is owed, after any payments that might be available are made.

This means that when bankruptcy is concluded, a debtor can eliminate the remaining unsecured debt owed to credit companies, pay day lenders, utility companies and other creditors whose claim is against you for money and not an actual asset or item, of which the debt is secured against.

This is one of the main and influential reasons people file for bankruptcy is receive a discharge of the unsecured debt that is owed. Often times, tens of thousands of dollars in credit card debt

Automatic Stay

Under Section 362 of the Bankruptcy Code, upon filing bankruptcy, the petitioner is granted an stay. This stay, which in puts every legal or collection act on hold, until it relief from this stay is allowed by the bankruptcy court.

What does this mean? How does this apply to an every day consumer?

This is one of the strongest protections afforded in bankruptcy. By filing for bankruptcy, under the court, all your creditors are prevented from taking any action against you. That means your property is safe, your are safe and creditors are no longer allowed to contact you or hassle you directly. This is great for people who are constantly hassled by creditors and feel overwhelmed.

Even more, if you have imminent foreclosure, a car recently repossessed, lawsuits pending, by filing for bankruptcy, the automatic stay stops all these actions. The foreclosure is delayed, the car (depending on how much time has passed and local state laws) can be returned, and all lawsuits will stop.

This stay while automatic, is not absolute, and provides for some protection.

But this is one of many different aspects of bankruptcy that provides protection for debtors, for filers, and for those who are honest but unfortunate.

Bankruptcy

In our economy, bankruptcy has become a word of almost everyday. While negative undertones exist, those eligible for bankruptcy who file are provided PROTECTION and  RELIEF from their creditors.

This concept is not so new, instead it predates the 13 colonies and comes from England. Further enough, it can be find in the U. S. Constitution. It is not part of the BILL OF RIGHTS or any of the AMENDMENTS that were added after. Bankruptcy law is provided within Section 1 Article 8 of the U.S. Constitution that outlines the specific Powers of Congress:

“To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;”

This may seem a little shocking or unexpected, but it is true. The laws generated by the Bankruptcy Code is aimed specifically at addressing debts, burdens and financial difficulties of individuals. While still somewhat associated with a stigma, bankruptcy provides many detailed laws that are aimed to provide protection of debtors from creditors.

So next time you think of the about bankruptcy, consider what type of creditor might pushing a negative association to bankruptcy, a friend next door you loaned you $100 or a credit card company loaning you $100 with +20% interest.

Don’t be afraid of bankruptcy, seek guidance from a bankruptcy attorney who can determine your eligibility, personal needs, and provide you with information to allow you to make an informed choice.

My office can provide that guidance.

Visit our site at:  WWW.LOOMLEGAL.COM

Or contact me directly: 310-261-2723

Omid Moezzi