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Discharged debts in bankruptcy

When a person in Kentucky goes through the bankruptcy process, many of the debts that once hung over their head may be eligible to be discharged. A bankruptcy debt discharge means that the debtor is under no legal obligation to repay a debt, and the creditor that issued the debt is not allowed to take any action to collect it.

After their bankruptcy case is concluded, however, some individuals may decide to repay certain discharged debts voluntarily. If the discharged debt is owed to a family member or friend, for instance, a person may feel that they have a personal obligation to repay the debt. Similarly, a person might decide to repay a discharged debt to a family doctor or businessperson that they regularly see so that they can maintain their good reputation in a community.

When debts are discharged in bankruptcy, the former debtor is also legally protected from workplace discrimination that is based on past debt they owed. This means that an employer cannot make hiring or firing decisions about an individual simply because they have discharged debts or filed for bankruptcy. A government denial of a work license or permit based on an applicant's bankruptcy filing is also not allowed to take place.

An individual who is considering filing for personal bankruptcy might want to first discuss the situation with an attorney. Because every person's financial circumstances are different, an attorney can work with a client in order to understand whether filing wold be the most advantageous form of debt relief. A bankruptcy attorney can also explain which debts are likely to be discharged at the end of the bankruptcy proceedings and which debts will remain.

Source: U.S. Courts, "Discharge In Bankruptcy", accessed on Jan. 27, 2015

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