Discharging Debt

• During a bankruptcy filing, the court discharges certain debts, meaning they release the debtor from owing certain kinds of debt. If a debt is discharged, it means that the creditors who owned that debt are handed a permanent “cease and desist” order. They are prohibited from every taking collection action for the debt, including letters and harassing telephone conversations.

The requirements for discharging debts tend to vary dependent upon the chapter of bankruptcy the debtor is instructed to file for. In Chapter 7 bankruptcy filing, which is common among most consumer debtors, the bankruptcy court grants the discharge right after the fixed time for filing complaints that object to the discharge has expired. Unless a creditor requests litigation regarding a certain debt and objects to the discharge, the debtor automatically gets it.

It is important for debtors to come to the understanding that not all debts are dischargeable. The different chapters of bankruptcy stipulate discharged versus non-dischargeable debt. It is listed in the Bankruptcy Code Section 523(a). Non-dischargeable debts are that way because of reasons regarding public policy. Common forms of non-dischargeable debt include student loan repayments, pension loan repayments, debts to government bodies for penalties and fines, and debts for malicious and willful injuries to property or person.

Even though a debt is discharged, the discharge can be revoked. For example, if proof is brought to the attention of the court whereby the debt was obtained through fraudulent acts, the discharge may be revoked. If a creditor wants to request that a discharge be revoked, they must do it within a year of the discharge filing.