Bankruptcy Discharge | What Happens After Bankruptcy Proceedings and Debt is Discharged

Bankruptcy discharge is a court order in a bankruptcy preceding that marks the conclusion of that proceeding and forgives the remaining debts that cannot be paid. A bankruptcy discharge marks the end of all existing debts which were included in the bankruptcy.

Debts discharged by bankruptcy

Bankruptcy discharges most debts. When a debt is discharged, it is no longer enforceable against the debtor personally. Dischargeable debts vary based on the chapter of filing. However there are certain debts that are not discharged by bankruptcy. These include certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor's operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.

Discharge under different chapters

In all chapters, a discharge can be denied. A Chapter 7 debtor does not have an absolute right to discharge. Creditors can object to a discharge. Under Chapter 11 and 13 the debtor receives a discharge when he makes payment according to the re-organization plan. The objecting creditor(s) must convince the court about the reason for the objection. The common reasons for denial of a discharge include failure to provide requested tax documents; failure to complete a course on personal financial management; transfer or concealment of property with intent to hinder, delay, or defraud creditors; destruction or concealment of books or records; perjury and other fraudulent acts; failure to account for the loss of assets; violation of a court order or an earlier discharge in an earlier case commenced within certain time frames before the date the petition was filed. Discharge under Chapter 11 and 13 can be denied if the debtor fails to make payment according to the re-organization plan.

Life after discharge

The objective of a bankruptcy petition is the discharge of debts. A bankruptcy discharge gives you a fresh start in life. A discharged debt can no longer be collected. When you are granted a discharge, ensure that you obtain your discharge papers from the bankruptcy court and keep them safely. Your discharge papers are the proof of your discharge.

Getting Legal Help

Bankruptcy discharge is not a right. You can be denied a discharge on various grounds. Bankruptcy can remain on your credit report for 10 years. You may have difficulty getting credit or finding a new job. An experienced bankruptcy attorney can guide you through the bankruptcy process and help you obtain a discharge and successfully deal with problems that you may face post discharge.

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