What’s Dischargable Debt When Considering Business Debt Settlement

When you file Chapter 7, 11, 12 or 13 bankruptcy, one of the many terms you will encounter during the process is that of dischargeable debts. Our law firm will help you with these debts and provide you with an understanding of the differences between dischargeable and non-dischargeable debts. The following will provide and in-depth look at all there is to know about dischargeable debts and how they can help you through the bankruptcy process.

What Are Dischargeable Debts?

In essence, dischargeable debts involve certain types of debts that are owed by the person filing for bankruptcy. When this person files bankruptcy, a discharge will completely release the debtor from any continued liability for specific debts that are owed. However, this doesn’t apply to all debts. This isn’t merely a stop-gap or reduction of the debt that is owed. Any debts that qualify as being dischargeable will no longer have to be payed and will be erased from the record of having been owed by the debtor. The order for these discharges will be provided to all creditors for the debts that apply, which means that they no longer have the ability to take any type of collection action on the debtor.

These extend to personal letters and telephone calls, ensuring that the creditor never disturbs the debtor and tries to get them to pay even after the debt has been discharged. While the debtor will not be liable for any debts that fall under discharged debts, there is a possibility that a valid lien that has been placed on personal property of the debtor as a means of securing payment from the owed debt will still remain open even after the bankruptcy case has ended. If a lien remains, a second creditor might be able to claim the lien. However, this can be made unenforceable during bankruptcy, which is why it’s important for our NYC bankruptcy law firm to be there with you to ensure that you don’t get hit with any of these charges.


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