Debt Liability After A Discharge

The sole purpose of bankruptcy is to provide you with debt resolution and relief from liability over old debts. This is generally done at the time of debt discharge, meaning your debts become uncollectible once the court rules the completion of your case. However, there are instances in which debt could be collectible after your discharge.

Special Circumstances

The first instance in which you could become liable for debts after your bankruptcy case is completed is in the area of ineligible debts. Debts like student loan payments, domestic support payments, criminal restitution, and some tax debts may not be eligible for discharge in bankruptcy. If you are carrying any ineligible debts in your case you will be liable for full repayment, as determined by prior order, even after your bankruptcy case has been completed.

Another instance in which you could resume liability for a debt after a discharge is in the case of reaffirming a debt. Reaffirmation of a debt is an agreement between you and your creditor that takes place during your case, which outlines your commitment to resume debt payments after the completion of your case. This commonly occurs with secured debts in a Chapter 7 case, in which you would agree to resume debt liability and payment responsibility on the property after the discharge in exchange for not having the asset liquidated.

It is important to speak with a Fort Worth bankruptcy attorney about your debts and the possibility for liability after a discharge before filing for bankruptcy. In many cases, reaffirming a debt is not necessary and you may be able to keep those assets through other means.