Bankruptcy Attorneys In Los Angeles County: The Discharge Of Debts

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.

Not every debt can be removed by this order. Some tax obligations are beyond its scope, as are fines in criminal cases or damages relating to drunken or intoxicated driving. Domestic obligations, namely spousal maintenance in divorce and child support, are also off limits.

The application for a discharge order requires the utmost integrity on the part of the applicant. Any debt must be specified, otherwise it may not be discharged with the others. Perjury or the destruction or concealment of business records, as an example, may also cause the court to reject the application.

If a debt pertains to criminal activity or fraud, the judge will not discharge it. Income or assets derived from that kind of activity prevent the granting of the order. The legal tenet at play here is that restitution in criminal cases cannot be alleviated through filing for bankruptcy.

The discharge of secured debts does not eliminate the creditor's right to repossess the asset, either. If the bankrupt entity wishes to retain the asset, they are required to negotiate a payment agreement with the creditor and then pay what is owed.

Bankruptcy is not an easy situation to handle. Sometimes, repayment is simply impossible. Professional legal representation can make this easier for other parties to accept.




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