What is Discharge (Bankruptcy)?
The court order that eliminates a debtor's personal liability for certain debts, meaning the debtor is no longer legally required to pay them.
Understanding Discharge (Bankruptcy)
Discharge is the goal of most bankruptcy cases. It releases the debtor from obligation to pay but doesn't remove valid liens on property. Some debts (student loans, child support, certain taxes, fraud-related debt) are generally non-dischargeable.
Examples
- 1Chapter 7 discharge granted after 4 months
- 2Receiving discharge after completing Chapter 13 plan
- 3Student loans surviving discharge
Related Terms
Bankruptcy
A legal proceeding that provides relief for individuals or businesses unable to pay their debts, allowing them to eliminate or restructure debt under court protection.
Chapter 7 Bankruptcy
A liquidation bankruptcy where non-exempt assets are sold to pay creditors, and remaining eligible debts are discharged, giving the debtor a fresh start.
Chapter 13 Bankruptcy
A reorganization bankruptcy where debtors propose a 3-5 year repayment plan to pay off all or part of their debts while keeping their property.
Automatic Stay
An injunction that takes effect immediately upon filing bankruptcy, stopping most creditor collection actions including lawsuits, wage garnishment, and foreclosure.
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