Bankruptcy Discharge

The term Bankruptcy discharge will come up a lot as you go through the bankruptcy process. What is a bankruptcy discharge? I like to say it is a Federal Court Order that legally relieves you of any obligation to pay back any of your debt. In a bankruptcy debt can be overwhelming. But once you get that discharge it is gone. It really is that simple. There are some things that cannot be discharges in a bankruptcy. The most common that everybody knows about are taxes, student loans, domestic support obligations, criminal fines, criminal sanctions, debt you occurred from fraud or false pretenses, law suites for sexual assault,  violent assault, or drinking and driving accidents,employee wages, 401 k loans, or debt that you reaffirm like a house of car loan. There are other things that can't be discharged but rarely do they ever come up. And most of those things tie back into fraud in some way for instance, if you harm someone and your behavior was willful and wanton.

You can only be denied a discharge for fraud, abuse, missing paperwork like the credit counseling, or you have already had a chapter 7 discharge within 8 years or a chapter 13 discharge within 6 years. 

the effect of a discharge is that debt is gone forever. If someone tries to collect on it down the road you can sue them either for violation of the bankruptcy discharge injunction or you can go after them for violation of the fair debt collection practices act. 

If you sign a reaffirmation agreement with a creditor you will not be discharging that debt. You are stuck with it until it is paid off. 

The most common objections to discharge are the 11 U.S.C. 707 of the bankruptcy code. This is where the bankruptcy law says you make too much money to file a chapter 7 and they either deny you a discharge or force you into a chapter 13 bankruptcy. Of course the chapter 13 bankruptcy discharge has the same effect it is just that you pay a percentage of your debt back. You will need to run means test numbers to determine if you are qualified for a chapter 7.