January 18, 2018

What does a “discharge” in bankruptcy mean?

One of the reasons people file bankruptcy is to get a “discharge” of their debt. A discharge is a court order which states that you do not have to pay the debts. Some debts cannot be discharged. For example, you cannot discharge debts for:

most taxes (however, income taxes for which a return has been on file for a long time can, in some circumstances, be discharged);
child support or alimony;
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. Anything that you incur after filing becomes your personal responsibility and is not discharged.

It is important to list all your property and debts in your bankruptcy schedules. If a debt is not listed, there is a possibility that it may not be considered for discharge.

You can only receive a chapter 7 discharge once every eight years.

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 if you wish to keep the property (the house or the car), you will need to keep making the payments.

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