Discharge can signal a point of major relief for an individual who has dealt with major life events that have resulted in unexpected financial stress. In many cases, creditors have used ruthless tactics in an effort to obtain payments, making personal bankruptcy a choice that is expected to stop harassment. Discharge may be viewed with great anticipation in this case, and a consumer can expect this to occur approximately four months after a Chapter 7 bankruptcy filing is completed.
Another type of bankruptcy may be considered if one does not meet the financial requirements for Chapter 7. In Chapter 13, a repayment plan is followed for up to five years before remaining debt is discharged. However, this should provide relief from harassment. Chapter 13 may be preferred for a variety of reasons even if an individual is eligible for Chapter 7. There may be assets that an individual prefers to keep rather than liquidate. It is also helpful to recognize that Chapter 13 only stays on one's credit report for seven years whereas a Chapter 7 remains for 10 years.
While entering into bankruptcy is typically a last resort for someone who has tried to keep up with payments, it may be wise to meet with a lawyer prior to filing. Errors in a bankruptcy may have an impact at a later date, especially if a creditor's information has been left out or incorrectly provided. Debts might survive a bankruptcy if errors are made during the filing process.
An individual who is experiencing financial distress may want to meet with a bankruptcy lawyer prior to reaching an extreme state of trouble to explore preemptive options for avoiding a bankruptcy and discharge. This may also simplify the filing process if records have been provided during these preliminary meetings.
Source: Fox Business, "When is a Bankruptcy Officially Discharged?", Erica Sandberg, August 04, 2014