The most important aspect of filing a second bankruptcy is generally whether or not a discharge can be obtained. If no discharge is available due to timing, the bankruptcy will not be successful in eliminating personal liability on debts. The frequency with which a debtor can obtain bankruptcy discharges is limited by statute.
The discharge is an order of the bankruptcy court ending personal liability on certain debts. The discharge is the instrument that erases debt and provides a fresh start to individual debtors.
Frequently Asked Questions
Our frequently asked questions also address Discharge:
In bankruptcy, a bankruptcy discharge ends a debtor's personal liability on all debts except those otherwise made non-dischargeable. This post contains a list of significant categories of non-dischargeable debt.
Occasionally, chapter 13 bankruptcy cases are filed by individuals who recently filed chapter 7 and obtained a chapter 7 discharge. As I noted in a post on filing second bankruptcy cases, a discharge in the chapter 13 case is unavailable unless 4 years have passed since the chapter 7 case was filed. However, chapter 13 can still be used adjust payment schedules, even without a discharge.
A bankruptcy discharge is granted by the bankruptcy court and serves as a permanent injunction against collecting certain past debts from the debtor personally. The discharge is the legal vehicle that grants the debtor a fresh start and wipes out past debts. Having a discharge granted is a goal of most bankruptcy filings.
Generally yes, a person is free to pay back a debt voluntarily after bankruptcy.
For most people, filing bankruptcy starts the journey of moving beyond problem debts. However in rare cases, an unexpected debt suddenly arises in the weeks or months after filing bankruptcy. Common examples might be an unanticipated medical expense or liability from an accident.
In the ordinary case, a chapter 13 discharge (which eliminates personal liability on debts) is granted shortly after the completion of plan payments. A
To answer this question, it is first helpful to describe what it means for a bankruptcy case to be closed or open.
We have discussed Discharge in the following posts on our bankruptcy blog:
In essence, money judgments are final orders entered by courts that a defendant in a lawsuit owes a certain sum to the plaintiff. They represent a particular stage of the life of a debt, and might arise from all manner of debts. Consumers are most often faced with judgments when a credit card lender or utility company successfully sues to collect an amount owed, an auto lender obtains a judgment following repossession of car worth less than the money owed, or a mortgage lender obtains a judgment following a foreclosure that fails to pay off the loan. The latter two are known as " deficiency judgments" and on the occasions that they are obtained, often surprise the debtor who thought losing their house or car was the end of that debt.
The bankruptcy discharge is a central concern to most debtors and to many creditors. Without going into the details, the discharge serves to wipe out personal liability on a substantial portion of debts. For most chapter 7 debtors, obtaining a discharge is a primary reason they filed, as it is the instrument of their fresh start. The chapter 13 discharge is similarly important, as is the reward obtained for completing a chapter 13 plan.
Once upon a time, the discharge available to debtors at the conclusion of a chapter 13 bankruptcy plan was known as a "super-discharge" as it ended personal liability on significantly more debts that its counterpart in chapter 7. Today, after the 2005 bankruptcy law (BAPCPA), the chapter 13 discharge isn't so super anymore. Nevertheless, it is not identical to the chapter 7 discharge in scope. This post considers what is dischargeable in chapter 13 bankruptcy, and highlights some notable differences with chapter 7.