What Is a Bankruptcy Discharge?

Learn about the court order that wipes out your debt in bankruptcy.

The most important part of a bankruptcy case—at least for many debtors—is the bankruptcy discharge. It’s the order that wipes out qualifying debt, such as credit card balances, utility bills, and medical debt, and is often the reason why people file in the first place.

How Long Does It Take to Get a Discharge?

If your bankruptcy chapter proceeds as planned—you satisfied all requirements and no one successfully objected to your filing—you’ll receive the discharge at the end of your case. For instance, in a Chapter 7 case, the order is usually sent out approximately three months after filing.

In a Chapter 13 bankruptcy, you won’t receive your discharge until you complete your three- to five-year repayment plan. Any remaining dischargeable debt, such as unpaid credit card balances or medical bills, will get wiped out at that time.

How Will I Find Out About My Discharge?

The court will notify you by mailing out a document called an “order of discharge.” The order won’t close your case, however. It will remain open until the bankruptcy trustee—the official who manages your matter—disperses available money to creditors, or until any outstanding bankruptcy litigation ends.

Will the Order List the Debts Discharged by the Court?

No—and many find this fact surprising. Instead of listing the wiped out debt, the order will provide general information about debt categories that don’t go away in bankruptcy (nondischargeable debt). For instance, it will explain that you’ll likely remain responsible for paying:

  • domestic support obligations (spousal or child support)
  • most student loans and tax debt
  • accounts that the court decides you can’t discharge
  • most fines, penalties, and criminal restitution
  • some debts that you failed to list correctly
  • particular loans owed to a retirement plan
  • money owed as a result of injuring someone while operating a vehicle while intoxicated, and
  • liabilities covered by a reaffirmation agreement (a court-approved agreement to continue paying a creditor).

While the order doesn’t provide the clarity that many debtors desire, it might be helpful to understand that creditors are expected to know whether a particular debt is dischargeable. Protections exist, too. A creditor that attempts to wrongfully collect a discharged debt is subject to paying for any resulting losses.

Reasons You Might Need Your Order After Bankruptcy

It’s not a bad idea to keep your discharge paperwork somewhere you can easily find it because you might need it in the future. For instance, a lender might ask for a copy if you apply for credit or a home mortgage.

Also, you’ll want to provide your bankruptcy case number, file date, and discharge date to any creditor that calls to collect a discharged balance. The information allows the creditor to verify the bankruptcy, and, after doing so, the calls will likely stop. If not, you can contact an attorney to help you handle the matter.

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