Discharge
What does "Discharge" mean in law?
A discharge in bankruptcy is a court order that releases the debtor from personal liability for most pre-petition debts, effectively providing the "fresh start" that is the fundamental policy of bankruptcy law. Under 11 U.S.C. section 524, the discharge operates as a permanent injunction barring creditors from taking any action to collect discharged debts. However, certain debts are excepted from discharge under section 523, including student loans (absent undue hardship), most tax debts, debts obtained by fraud, domestic support obligations, and debts arising from willful and malicious injury. A discharge may be denied entirely under section 727 if the debtor engaged in fraudulent conduct, destroyed records, or failed to complete required financial management courses.
Definition
A discharge in bankruptcy is a court order that releases the debtor from personal liability for most pre-petition debts, effectively providing the "fresh start" that is the fundamental policy of bankruptcy law. Under 11 U.S.C. section 524, the discharge operates as a permanent injunction barring creditors from taking any action to collect discharged debts. However, certain debts are excepted from discharge under section 523, including student loans (absent undue hardship), most tax debts, debts obtained by fraud, domestic support obligations, and debts arising from willful and malicious injury. A discharge may be denied entirely under section 727 if the debtor engaged in fraudulent conduct, destroyed records, or failed to complete required financial management courses.
Example
After completing her Chapter 7 case, the debtor received a discharge order eliminating $85,000 in credit card debt, though her $40,000 student loan survived as a non-dischargeable obligation.