When you sell your home shortly before or after filing a Chapter 7 bankruptcy, you can only be sure that you’ll be able to protect the proceeds if your state provides a specific exemption (law) that allows you to do so—or if you use the proceeds to purchase another property eligible for a homestead exemption. After redemption, the debtor owns the property free and clear. When a debtor files Chapter 13 bankruptcy, the debtor must either surrender the secured collateral to the creditor, pay off the debt over the course of the reorganization plan in years, or pay the debt off outside the reorganization plan, usually within a shorter period of time. real estate bankruptcy Zadford Nebraska finlay fine jewelry bankruptcy bankruptcy automatic stay plaintiff squared daewoo logistics bankruptcy taha'a sacred mount fly pluna airlines bankruptcy Knotts Island North Carolina bankruptcy bidding bankruptcy lawyers in southern nj campgrounds montataire goss international bankruptcy freemonee network files bankruptcy nyves falling behind on.
Since a chapter 12 or chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. The court may deny an individual debtor's discharge in a chapter 7 or 13 case if the debtor fails to complete "an instructional course concerning financial management. Unless there is litigation involving objections to the discharge, the debtor will usually automatically receive a discharge.
The Federal Rules of Bankruptcy Procedure provide for the clerk of the bankruptcy court to mail a copy of the order of discharge to all creditors, the U. The debtor and the debtor's attorney also receive copies of the discharge order. The notice, which is simply a copy of the final order of discharge, is not specific as to those debts determined by the court to be non-dischargeable, i.
The notice informs creditors generally that the debts owed to them have been discharged and that they should not attempt any further collection. They are cautioned in the notice that continuing collection efforts could subject them to punishment for contempt. Any inadvertent failure on the part of the clerk to send the debtor or any creditor a copy of the discharge order promptly within the time required by the rules does not affect the validity of the order granting the discharge.
Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code. Section a of the Code specifically excepts various categories of debts from the discharge granted to individual debtors.
Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons based either on the nature of the debt or the fact that the debts were incurred due to improper behavior of the debtor, such as the debtor's drunken driving.
There are 19 categories of debt excepted from discharge under chapters 7, 11, and A more limited list of exceptions applies to cases under chapter Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section a applies.
The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor's operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.
The types of debts described in sections a 2 , 4 , and 6 obligations affected by fraud or maliciousness are not automatically excepted from discharge.
Creditors must ask the court to determine that these debts are excepted from discharge. In the absence of an affirmative request by the creditor and the granting of the request by the court, the types of debts set out in sections a 2 , 4 , and 6 will be discharged. A slightly broader discharge of debts is available to a debtor in a chapter 13 case than in a chapter 7 case.
Debts dischargeable in a chapter 13, but not in chapter 7, include debts for willful and malicious injury to property, debts incurred to pay non-dischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings.
Although a chapter 13 debtor generally receives a discharge only after completing all payments required by the court-approved i. Such a discharge is available only to a debtor whose failure to complete plan payments is due to circumstances beyond the debtor's control. The scope of a chapter 13 "hardship discharge" is similar to that in a chapter 7 case with regard to the types of debts that are excepted from the discharge. A hardship discharge also is available in chapter 12 if the failure to complete plan payments is due to "circumstances for which the debtor should not justly be held accountable.
In chapter 7 cases, the debtor does not have an absolute right to a discharge. An objection to the debtor's discharge may be filed by a creditor, by the trustee in the case, or by the U. Creditors receive a notice shortly after the case is filed that sets forth much important information, including the deadline for objecting to the discharge.
To object to the debtor's discharge, a creditor must file a complaint in the bankruptcy court before the deadline set out in the notice. Filing a complaint starts a lawsuit referred to in bankruptcy as an "adversary proceeding. The court may deny a chapter 7 discharge for any of the reasons described in section a of the Bankruptcy Code, including failure to provide requested tax documents; failure to complete a course on personal financial management; transfer or concealment of property with intent to hinder, delay, or defraud creditors; destruction or concealment of books or records; perjury and other fraudulent acts; failure to account for the loss of assets; violation of a court order or an earlier discharge in an earlier case commenced within certain time frames discussed below before the date the petition was filed.
If the issue of the debtor's right to a discharge goes to trial, the objecting party has the burden of proving all the facts essential to the objection. In chapter 12 and chapter 13 cases, the debtor is usually entitled to a discharge upon completion of all payments under the plan. As in chapter 7, however, discharge may not occur in chapter 13 if the debtor fails to complete a required course on personal financial management.
A debtor is also ineligible for a discharge in chapter 13 if he or she received a prior discharge in another case commenced within time frames discussed the next paragraph. Unlike chapter 7, creditors do not have standing to object to the discharge of a chapter 12 or chapter 13 debtor. Creditors can object to confirmation of the repayment plan, but cannot object to the discharge if the debtor has completed making plan payments. The court will deny a discharge in a later chapter 7 case if the debtor received a discharge under chapter 7 or chapter 11 in a case filed within eight years before the second petition is filed.
The court will also deny a chapter 7 discharge if the debtor previously received a discharge in a chapter 12 or chapter 13 case filed within six years before the date of the filing of the second case unless 1 the debtor paid all "allowed unsecured" claims in the earlier case in full, or 2 the debtor made payments under the plan in the earlier case totaling at least 70 percent of the allowed unsecured claims and the debtor's plan was proposed in good faith and the payments represented the debtor's best effort.
A debtor is ineligible for discharge under chapter 13 if he or she received a prior discharge in a chapter 7, 11, or 12 case filed four years before the current case or in a chapter 13 case filed two years before the current case.
The court may revoke a discharge under certain circumstances. For example, a trustee, creditor, or the U. Different state laws and different types of bankruptcy filings dictate how soon you can sell your house after bankruptcy. If the court allows, you may be able to sell your home as soon as 30 days after you file bankruptcy , at the bankruptcy hearing.
But depending on the particulars of your case, you may have to wait for three to six months after you file bankruptcy to sell your house. As soon as you file for Chapter 7 bankruptcy, your possessions come under the control of the court. You can't sell your home without the court's express permission. Often court will order a home sale as a stipulation of the bankruptcy — this typically happens when the house is a significant asset and the sale is required to satisfy some debts.
Depending on where you live, you may be entitled to a homestead exemption. In Chapter 7 bankruptcy, the homestead exemption protects some of your equity from creditors. If the amount of your exemption together with your mortgage loan exceeds the value of your home , the court is unlikely to order a sale. That's because the home has no value to the bankruptcy estate. In this scenario, you can ask the court to "abandon" your home.
Once the court abandons an asset, you're free to sell it even if the bankruptcy is not yet discharged. As soon as the court discharges your bankruptcy, you're free to sell any assets that you still own.
A Chapter 7 bankruptcy usually discharges after three to six months. However, there are lots of unique factors in individual bankruptcy cases. The court may make specific stipulations that would delay the immediate selling of a home , such as clearing any liens and judgments secured against it.