Discharge
What does discharge mean?
The bankruptcy discharge is given when you finish the case. The Judge enters an order forgiving debt that is eligible to be discharged. When a debt is discharged, this means it is forgiven. This is like a “judicial pardon.” The debt does not disappear. But it is no longer collectible. Once the Judge signs the discharge order, your case ends.
What debts can be discharged?
This depends on the type of bankruptcy you file and the type of debt.
Chapter 7 bankruptcy discharges:
- Most unsecured debt such as credit cards, signature loans, and medical bills.
- Secured debt (loans or credit with property pledged) is discharged if you give back the property. Examples would be car loans, furniture loans, or home loans. You must return the property. If you signed a reaffirmation agreement, you must rescind it (cancel it) by the deadline.
Chapter 13 bankruptcy discharges:
- Same debt as Chapter 7 bankruptcy, but more.
- Non-support debts from a divorce
- Debts for willful and malicious injury to property (not to a person)
What debts can’t be discharged?
In both Chapter 7 and Chapter 13, you can’t discharge:
- Student loans
- Most taxes
- Alimony and child support
- Certain debts for government benefit overpayments
- Debts arising from death or personal injury caused by DWI or under the influence of drugs
- Criminal fines and restitution included in a criminal conviction
- Debts for false pretenses or fraud – if adversary action filed by a creditor
- Debts for willful or malicious injury or death of a person – if adversary action filed by a debtor
Do I get a discharge if my case is dismissed?
If you do not complete the bankruptcy, you do not receive a discharge. You receive a dismissal. The unpaid debt is still owed. The bankruptcy filing will still show up on your credit report for 10 years.