What is a Discharge In Bankruptcy ?
Obtaining a bankruptcy discharge is the goal of most bankruptcy case filings. There are reasons to file a bankruptcy case where the Debtor is not eligible for discharge, such as to buy time until the debtor IS eligible for a bankruptcy discharge, but generally getting a discharge is the goal of a Chapter 7 or Chapter 13 consumer bankruptcy filing.
The US Court in Denver and the Bankruptcy Code (11 USC 101- definitions) define bankruptcy discharge as follows: A bankruptcy discharge releases the Debtor from personal liability for certain kinds of debts. In other words a debtor is no longer required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any action on discharged debts including legal action and communication with the debtor such as telephone calls, letters and personal contacts.
When a bankruptcy case concludes, and the debtor has fulfilled all of the obligations he or she is required to perform they will get a Notice of Chapter 7 discharge or Notice of Chapter 13 discharge in the mail. I try to notify my clients of this event and explain what it is when it happens directly by email or telephone call. The “discharge” is a good thing, it is important to distinguish that event from a “dismissal” of a bankruptcy case. This is the goal of what we have been doing.
Another point I would like to make about bankruptcy discharges is that while permanent, they are conditional on paying the Chapter 7 trustee any amounts due. In other words, if by agreement or litigation you are required to pay money to the bankruptcy trustee, your discharge will revoked if you do not pay what is owed.
It is rare for my bankruptcy clients to owe money to the trustee, and if they do, they are made aware of the why and when of paying. I try very hard to arrange things so that no money is due in a Chapter 7 case, as this gives the Debtor a true fresh start. For the same reason I don’t encourage Debtors to borrow the legal or filing fees, though it is legal to do this. It’s a great feeling to be truly “free” of your debt and while this is not always possible I try to make it happen for my clients. The point is that even if you have a discharge, you may still have things to do in your case.
The definitions section of the Bankruptcy Code can be found at 11 U.S.C. 101 et seq. You may call me directly if any aspect of bankruptcy is confusing to you. Often legalese, understanding legal terminology goes a long way toward your being comfortable with your bankruptcy case. Feel free to ask any questions of me in this regard. When you get a qualified bankruptcy lawyer in Colorado, these things are explained. I can be reached at (303) 501- 4028.