Bankruptcy Attorneys In Los Angeles County: The Discharge Order

By Ivy Catubig


A bankrupt business is usually an undesirable situation for all affected parties. Suppliers and service providers are not paid and workers have to seek alternative employment. Yet there are cases where the struggling business is genuinely not in a position to pay what it owes, and it may therefore use bankruptcy attorneys in Los Angeles County to obtain a discharge of debt through the legal system.

A debt discharge order is issued by the court and entails that the debtor no longer has to pay most or all of their debts. Creditors have no recourse against this order. Only the debts in existence before the order was issued are then permanently canceled.

There are exceptions to this order. These are debts which cannot legally be discharged. Some types of tax debt, student loans, alimony and maintenance of kids cannot be canceled. It is also not possible to eliminate criminal fines or personal damage liability associated with driving under the influence of alcohol or drugs.

During the court proceedings, the indebted person must be absolutely honest. All debts must be identified so as to prevent the exclusion of one or more of them in the order. False testimony or the deliberate obstruction of the court, such as through making business records unavailable, may lead to a negative outcome.

Also, debts associated with crime or fraudulent operations obviously cannot be discharged. Any money or goods obtained through such measures will obstruct the discharge proceedings. It is bad in law to assume that restitution in criminal prosecutions can be evaded through an official bankruptcy order.

The elimination of a secured debt does not always imply that the debtor keeps the asset. Even if the debt is discharged, the creditor may still repossess the financed item or property. If the debtor desires to retain it, they should make a repayment arrangement to that effect.

Bankruptcy is a problematic occurrence. But for some people, repayment is impossible. By following a formal legal process, assisted by experienced practitioners, bankrupt entities may elicit a more understanding response from their creditors.




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