What is 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.

The bankruptcy discharge eliminates personal liability on a debt for the debtor. If there is a co-obligor (co-signer) on a debt, that co-obligor's personal liability survives the discharge. Liens and other security interests also survive to the extent enforceable against property. So while a lender cannot sue the debtor personally, it can still foreclose or repossess collateral. Therefore, as a practical matter, only unsecured debt is truly eliminated by the discharge.

Discharges are granted under several chapters of the bankruptcy code, including both chapter 7 and chapter 13. The discharge in chapter 13 is slightly more expansive; for example, it includes unpaid martial property settlements, unlike in chapter 7. There are a number of exceptions to discharge, too numerous to list here, which cause debts such as student loans and child support obligations to survive the discharge.

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