With financial problems come added issues of wage garnishment, creditor harassment, threat of foreclosure and asset forfeiture. Burdened by debt, Arizona residents may be desperate to take concrete steps to wipe out most of their bills, and these issues simply compound the matter. This is why, once they make the decision to file for bankruptcy, either Chapter 7 or 13, they wonder when their debts will be discharged, and how long it will be before they can restart their financial life anew.
Once a bankruptcy petition has been filed and all allowable debts are formally forgiven, this is known as discharge of debt. Depending on the type of bankruptcy Arizona residents apply for, discharge can happen at different times.
In Chapter 7 bankruptcy, known as liquidation bankruptcy, filers can wipe out most of their unsecured debt. Once the whole legal procedure is complete, filers no longer owe any money mentioned in the petition to their creditors around four months after that point.
In contrast to liquidation, Chapter 13 bankruptcy is a reorganization of debt. Those filers who do not qualify for Chapter 7 bankruptcy usually avail Chapter 13-in this plan, debtors pay a portion of what they owe to creditors and the remainder of allowable debts is not discharged until three to five years later, after the court has assessed the remainder and approved the discharge.
The relief that comes with filing for bankruptcy is not only -it is also emotional. After struggling to make ends meet for so long and the looming threat of asset forfeiture if payments are not met, filers can now spend money on essentials rather than making late payments that were not bringing their debt down. Arizona residents seeking this type of relief may also want to consider filing for personal bankruptcy based on their individual circumstances and get ready to feel emotional and financial closure.
Source: FOX Business, "When is a bankruptcy officially discharged?," Erica Sandberg, Aug. 4, 2014