Learn more about the bankruptcy discharge law.
- What Debts are Dischargeable?
- What Debts are not Dischargeable?
- Difference between a Chapter 7 and Chapter 13 Discharge?
- Objections to a Discharge?
- Objections to a Chapter 13 Plan or Discharge?
- Can the discharge be revoked?
- What Happens After the Discharge?
A discharge of your debts is the ultimate goal of filing bankruptcy. Under the federal bankruptcy statute, a discharge is a release from personal liability for all your dischargeable debts. In other words, you no longer have to pay any of the debts that are discharged through the bankruptcy.
The discharge acts as a permanent order to all of your creditors that they must refrain from taking any type of collection action against you with regard to your discharged debts. This includes any type of legal action or any type of communication including calls, letters, or direct personal contact made in an attempt to collect the discharged debt.
The prohibition of credits taking action against you does not include creditors who have a valid lien against specific property that has not been avoided in the bankruptcy case. A creditor with such a lien is still allowed to take legal action to enforce the lien and recover the secured property.
When you file a Chapter 7 bankruptcy you usually receive an automatic discharge at the end of your case. If you don’t have any assets that are not covered by exemptions, usually your case will be discharged about 2 months after the 341 Meeting of Creditors for a total of four months from the time of filing. If there are nonexempt assets for the trustee to collect and distribute to your creditors, a discharge usually takes about 6 months from the time of filing but can take longer.
In a Chapter 13 case, you have a payment plan that runs from 3 to 5 years and you have to pay back all of your priority debts like alimony and child support and a certain portion of your unsecured debt based on the income you have available under your plan to pay those debts. Once the plan is completed you will receive your discharge. In some cases, you might also qualify for a hardship discharge in a Chapter 13 case.
In most cases, unless there is an objection to the discharge, the discharge will be automatically granted and clerk of the bankruptcy court will mail a copy of the discharge to all the creditors of the case and the debtor and/or the debtor’s attorney. The discharge letter does not specifically state which debts have been discharged but just includes a general notice that the debt available to be discharged in the bankruptcy has in fact been discharged. The letter also informs the creditors that they should not make any attempt to collect the discharged debt and that if they do they could be subject to a charge of contempt.