When you meet with a licensed insolvency trustee to review your debt options, it is easy to be overwhelmed by the volume of information. Any profession will have common words or expressions that are confusing to outsiders. Insolvency practitioners are no different.
For example, consider the word “discharge.” It can mean many things depending on the context, but generally comes back to the concept of being released. In the context of bankruptcy, discharge means to be released from the obligation to repay your debts.
That’s really the purpose of the bankruptcy system, to be legally released from your debt obligations when it is not possible to pay them in full. Many have taken to calling this a “fresh start” because the discharge signals the end of the bankruptcy.
A person’s income level and whether or not he or she has been bankrupt previously will determine how long they are in bankruptcy before being eligible to be discharged. Most personal bankruptcies end without the requirement to go to court. This is called an “automatic” discharge. A court hearing is only required if the person is not compliant with his or her duties or if a creditor has requested a court review. I appreciate that the prospect of going to court can sound intimidating. Understand that creditors rarely make such a request. If they do, it is usually based on a belief that the bankrupt person did something reckless or misleading to harm the creditor financially.
If you are reading this and looking for help with your debt problems, take time to do some research. When you are ready, feel free to call or e-mail so that we can review your circumstances and options in detail.