How Does Bankruptcy Court Works
How does conversion of a debt work in bankruptcy courts? When a debt is discharged in bankruptcy court, the debtor does not have to pay the debt. When you file for bankruptcy, you must list all your debts and assets. If you have one or more debts that would be discharged, those creditors must be notified and given a chance to object to the discharge of the debt. If they do not object, the judge will approve your discharge, which means you do not have to pay that debt. If there is an objection from a creditor, the judge will schedule a hearing on it. After the hearing, if the judge approves your discharge of all non-disputed debts, then those debts will be discharged, and you will not have to pay them. For example, if you owe $10,000 on your credit cards and $50,000 on a car loan where only $20,000 is disputed by the lenders, then only $20,000 will be discharged, and you will still owe $30,000 on your credit cards and $30,000 on your car loan. When someone has an outstanding debt for a ...