What Does a Discharge of a Debt Mean?

August 27, 2012

When you file a bankruptcy case, the goal is to be discharged from your debts.  A bankruptcy discharge is a bankruptcy court order that prohibits creditors from ever attempting to collect that debt against you personally.  The Discharge Order  is a permanent injunction.  It stops creditors from ever collecting that debt from you, personally, again.

Is It Permanent?

Yes, the discharge is permanent.  Debts that are discharged can not be revived after they are discharged.

What debts are not discharged in a Chapter case?

In a Chapter 7 case, you are not discharged from some taxes, child support, alimony, damages assessed because you were driving while under the influence of alcohol or drugs and student loans.  A creditor can object to your discharge if you incurred debt by fraud, but there is a very short time limit for those objections to be filed.  If an objection is not timely filed by the creditor, even debts incurred by fraud are discharged.

Liens are not discharged in a Chapter 7 case.

If you incurred debt to purchase a car or a house, those debts are secured debts.  In other words, those creditors can foreclosure on your house or your car if you don’t pay their debt because they financed the purchase of that house or car.  So, even though you get discharged from the debt to these creditors, those creditors can still foreclose on their collateral if you do not pay their debts.  If you want to keep you house or your car, you must pay the secured creditor who loaned you the money to purchase those assets, even though you were discharged from that debt.

If you are unsure about which of your debts can be discharged, please ask your bankruptcy attorney during your initial consultation with the attorney.

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