CAN I RE-PAY A DISCHARGED DEBT AFTER MY BANKRUPTCY CASE HAS BEEN CONCLUDED?

A debtor who has received a discharge may voluntarily repay any discharged debt. A debtor may repay a discharged debt even though it can no longer be legally enforced. Sometimes a debtor agrees to repay a debt because it is owed to a family member or because it represents an obligation to an individual for whom the debtor’s reputation is important, such as a family doctor. Visit DLBLAW for more information on Utah bankruptcy.

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What is a Chapter 13 Hardship Discharge?

If after confirmation of a Chapter 13 Bankruptcy plan, circumstances arise that prevent the debtor from completing the plan the debtor may be able to obtain a hardship discharge. In such situations, the debtor may ask the court to grant a “hardship discharge.” 11 U.S.C. § 1328(b). Generally, such a discharge is available only if: (1) the debtor’s failure to complete plan payments is due to circumstances beyond the debtor’s control and through no fault of the debtor; (2) creditors have received at least as much as they would have received in a chapter 7 liquidation case; and (3) modification of the plan is not possible. Injury or illness that precludes employment sufficient to fund even a modified plan may serve as the basis for a hardship discharge. The hardship discharge is more limited than the discharge described above and does not apply to any debts that are nondischargeable in a chapter 7 case. 11 U.S.C. § 523.

WHAT DISCLOSURES MUST A COLLECTION AGENCY PROVIDE A DEBTOR?

Typically, a collection agency begins its efforts with an introductory letter. This letter usually contains the required legal disclosures, which include:
• The amount of the debt,
• The name of the original creditor,
• The period of time in which the debtor may dispute the validity of the debt (thirty days), and
• The obligation of the collection agency to send the debtor verification of the debt if its validity is disputed.

In the original correspondence, the collection agency must also inform the debtor that it is attempting to collect a debt and that any information it gathers from the debtor or other sources will be used for that purpose. If this information is not included in the initial contact letter, the collection agency must provide it within five days.

Most lawyers recommend that debtors request verification of the debt because, in that case, a collection agency may not resume collection efforts until the information is confirmed with the original creditor. The collection agency may not, whether by threatening to destroy the debtor’s credit rating or by threatening to sue if payment is not received immediately, make a statement in the initial correspondence that overshadows the debtor’s right to dispute the debt for thirty days. Visit our website www.dlblaw.com

What is a Chapter 13 Hardship Discharge?

If after confirmation of a Chapter 13 Bankruptcy plan, circumstances arise that prevent the debtor from completing the plan the debtor may be able to obtain a hardship discharge. In such situations, the debtor may ask the court to grant a “hardship discharge.” 11 U.S.C. § 1328(b). Generally, such a discharge is available only if: (1) the debtor’s failure to complete plan payments is due to circumstances beyond the debtor’s control and through no fault of the debtor; (2) creditors have received at least as much as they would have received in a chapter 7 liquidation case; and (3) modification of the plan is not possible. Injury or illness that precludes employment sufficient to fund even a modified plan may serve as the basis for a hardship discharge. The hardship discharge is more limited than the discharge described above and does not apply to any debts that are nondischargeable in a chapter 7 case. 11 U.S.C. § 523.

More information on Utah Chapter 13 bankruptcy can be found HERE.

CAN A BANRUPTCY DISCHARGE BE REVOKED?

A discharge may be revoked under certain circumstances. For instance, a trustee, creditor, or the United States trustee may request that the court revoke the debtor’s discharge in a chapter 7 case based on:

• Allegations that the debtor obtained the discharge fraudulently;
• the debtor failed to disclose the fact that he or she acquired or became entitled to acquire property that would constitute property of the bankruptcy estate or;
• the debtor committed one of several acts of impropriety described in section 727(a)(6) of the Bankruptcy Code.

Usually, a request to revoke the discharge must be filed within one year after the granting of the discharge or, in some cases, before the date that the case is closed. It is up to the court to determine whether such allegations are true and, if so, to revoke the discharge.

In a chapter 13 case, if confirmation of a plan or the discharge is obtained through fraud, the court can revoke the order of confirmation or discharge.

WHAT IS A BANKUPTCY ADVERSARY PROCEEDING?

An adversary action is a lawsuit filed within a bankruptcy proceeding. There are many reasons for these lawsuits, sometimes even filed by the debtor when a creditor violates the automatic stay. At the Law Office of Douglas L. Barrett, LLC, we aggressively represent debtors in adversary actions as well as other aspects Utah Chapter 7 bankruptcy and Utah Chapter 13 bankruptcy.

WHAT IS A BANKRUPTCY ESTATE?

A bankruptcy “estate” is defined in Title 11 of the United States Code § 541. It is a very broad definition and includes all legal or equitable interests of the debtor in property, wherever located, as of the commencement of the case. It also includes any property in which the debtor has an ownership interest that is recovered by the trustee if it was merely out of the possession of the debtor.

In certain circumstances, property acquired by the debtor within 180 days after the filing of the case may also be considered part of the bankruptcy “estate”. A Utah attorney should be consulted if there is any question as to whether specific property will be included in the bankruptcy “estate” and the Utah exemptions that may be available to the debtor.