Discharge
Once you complete your bankruptcy, you will receive a discharge of your debts. A discharge is a court order called a "Discharge of Debtor," that eliminates your personal liability for all of your debts and liabilities that can be eliminated under Federal law. A discharge also provides you with continued protection from creditors and bill collectors by virtue of the discharge injunction, which provides a similar protection to the protection afforded to you by the automatic bankruptcy stay during your case. The automatic stay protects you from the moment your case is filed and through the date of discharge, and then after your discharge the discharge injunction continued to protect you thereafter.
Discharge In Chapter 7 Cases
In a Chapter 7 case, you will typically receive a discharge about 90 days after your case is filed with the Court, assuming that your case is filed and executed flawlessly and there are no objections or allegations of fraud or other wrongdoing. Debts that are usually discharged by a discharge in a Chapter 7 case include:
- credit cards and collection accounts
- mortgage loans
- home equity loans
- car debt (car loan debt)
- medical bills
- personal loans
- business loans and credit cards
Not all debts are discharged. Debts are not discharged include: recent taxes (you can generally file bankruptcy on taxes that are over three years old), student loans, and divorce debt (owing to your ex-spouse as a result of a divorce or marital settlement agreement), among other debts. A Chapter 7 lawyer can advise you as to which of your debts will be discharged.
Discharge In Chapter 13 Cases
In a Chapter 13 case, you will receive a discharge once you complete your plan payments. Depending on your income level and your Chapter 13 plan, you will complete your plan payments in about 3 to 5 years. If you pay off your plan early, then you can obtain your discharge sooner. Debts that are usually discharged by a discharge in a Chapter 13 case include:
- credit cards and collection accounts
- home mortgage loans
- home equity loans
- car loans
- medical bills
- personal debts
- business loans and credit cards
There are some debts that typically survive (are not discharged in) a Chapter 13 filing, such as, for example, recent taxes (older income taxes can be dischargeable, depending upon your circumstances), student loans (student loan debt can be dischargeable if you can show "undue hardship"), divorce debt you owe a spouse from a divorce or separation agreement, and certain other types of debts.
