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What Is a Bankruptcy Discharge and How Does It Operate?

One of the reasons people file bankruptcy is to get a “discharge.” A discharge is a court order which states that you do not have to pay most of your debts. Some debts cannot be discharged.

For example, you cannot discharge debts for ...

most taxes;
child support;
alimony;
most student loans;
court fines and criminal restitution; and
personal injury caused by driving drunk or under the influence of drugs.

The discharge only applies to debts that arose before the date you filed. Also, if the judge finds that you received money or property by fraud, that debt may not be discharged.

It is important to list all your property and debts in your bankruptcy schedules. If you do not list a debt, for example, it is possible the debt will not be discharged. The judge can also deny your discharge if you do something dishonest in connection with your bankruptcy case, such as destroy or hide property, falsify records, or lie, or if you disobey a court order.

You can only receive a chapter 7 discharge once every eight years. Other rules may apply if you previously received a discharge in a chapter 13 case. No one can make you pay a debt that has been discharged, but you can voluntarily pay any debt you wish to pay. You do not have to sign a reaffirmation agreement (see below) or any other kind of document to do this.

Some creditors hold a secured claim (for example, the bank that holds the mortgage on your house or the loan company that has a lien on your car). You do not have to pay a secured claim if the debt is discharged, but the creditor can still take the property.

www.usdoj.gov

• Bankruptcy
• When you file bankruptcy
• What Is a Reaffirmation Agreement
• What Is a Bankruptcy Discharge
• Chapter 7, Title 11, United States Code
• enter bankruptcy protection
• can bankruptcy stop foreclosure

• Bankruptcy Process
• Bankruptcy Filing Fees
• Chapter 7
• Chapter 7 Eligibility
• How Chapter 7 Works
• Role of the Case Trustee
• Chapter 7 discharge

The Bankruptcy Code governs the process of liquidation under the bankruptcy laws of the United States. (In contrast, Chapter 11 governs the process reorganization of a bankruptcy). Chapter 7 is the most common form of bankruptcy in the United States.

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