One of the reasons why people file for bankruptcy is because of the "bankruptcy discharge." What is the bankruptcy discharge, and why are so many debtors drawn to it? The bankruptcy discharge releases the debtor so they are no longer liable for a debt.

Once a debt is "discharged" through the bankruptcy, the debtor is no longer required by law to pay that debt. What's more, the discharge acts as a permanent order, which prohibits creditors from engaging in any form of collection activities, including:

• Calling the debtor
• Sending letters to the debtor
• Filing a lawsuit against the debtor
• Personally contacting the debtor

While a debtor is no longer personally liable for any debts that are discharged through the bankruptcy, a valid lien, for example, one that has been placed against the debtor's home, may survive the bankruptcy and therefore the debtor would still be obligated to pay it.

When are debts discharged?

It depends upon the type of bankruptcy that is filed. For example, in a Chapter 7 case, the discharge typically occurs about four months after the bankruptcy is filed. With a Chapter 13, the court usually grants a discharge upon the completion of the bankruptcy repayment plan, which lasts from 3 to 5 years.

Not all debts can be discharged in a bankruptcy; the debts that can be discharged vary depending upon the chapter that is filed, however, the types of debts that generally cannot be discharged in a bankruptcy include certain types of taxes, child and spousal support arrears, court-ordered fines and victim restitution to name a few.

In a Chapter 7 for example, credit card debt (which can be in the tens of thousands), medical debt, ambulance bills, utility bills, certain taxes (older than 3 years) and personal loans can all be discharged through bankruptcy.

For more information about the bankruptcy discharge, contact a bankruptcy lawyer!