What is a bankrupcy discharge?
We bankruptcy lawyers throw the term "discharge" around so much, that I've always assumed that everyone knew what it meant. Bankruptcy Discharge. It sounds like it would speak for itself. So let's clarify exactly what the discharge is.
A bankruptcy discharge is a court order which mandates that certain types of creditors be forever barred from the collection of debt. This court order acts as a statutory injunction against creditors. It is commonly thought that a debt which has been discharged disappears or has been "wiped out." In reality, the debt does not go wnywhere, the creditor just cannot collect on the debt, which as a final result ends up being the same thing.
The relief of the discharge is one of the primary reasons debtors file for bankruptcy proetection, and it is the usualy result of a chapter 7 bankruptcy case filing, or a chapter 13 case filing after a payment plan has been executed. In most instances where discharge is sought, discharge is granted, however it can be denied for debtor misconduct, and as the result of a judgment in a creditor's adversary proceeding. The most common debts that are discharged in a bankruptcy case are unsecured debt like credit card debt and medical debt, certain tax debt, personal loans, wholly unsecured 2nd mortgages, vehicle loan deficiencies, home loan deficiencies, and many more. If you have a question about whether a particular debto would be dischargeable, be sure to speak to an experienced bankruptcy attorney.