What Is a Bankruptcy Discharge?

A bankruptcy discharge is the court order that wipes out your debt in bankruptcy.

By , Attorney · University of the Pacific McGeorge School of Law

A bankruptcy discharge is a court order that eliminates qualifying debt in a bankruptcy case, and, for most bankruptcy filers, the bankruptcy discharge is why they file for bankruptcy. It allows them to discharge burdensome obligations like credit card balances, utility bills, and medical debt.

Most filers receive a bankruptcy discharge about four months after filing for Chapter 7 bankruptcy and within weeks of completing a Chapter 13 plan. Once the filer receives a bankruptcy discharge, the filer is no longer responsible for paying the discharged debt. A creditor can't call, send demand letters, report nonpayment of the obligation to credit reporting agencies, file a lawsuit, or take other actions to collect the discharged debt.

When to Expect the Bankruptcy Discharge

If your bankruptcy chapter proceeds as planned, you'll receive the discharge after satisfying all requirements, assuming no one successfully objects to your filing. For instance, the bankruptcy court will issue the bankruptcy discharge after you've done the following:

  • filed the official petition, schedules, and required local forms
  • provided the court with accurate documentation of your debts, assets, income, and financial dealings
  • attended the meeting of creditors (and the confirmation hearing in Chapter 13)
  • participated in a session with a credit counselor
  • completed a financial management course, and
  • if filing under Chapter 13, paid all Chapter 13 repayment plan payments.

How You'll Learn About the Bankruptcy Discharge

The court will notify you by mailing an "order of discharge." Sometimes, the order is called a "discharge order" or "discharge letter."

Bankruptcy Discharge Orders Don't List Eliminated Debts

Many people are surprised that the order doesn't list the particular debts discharged in the case. Instead of listing the filer's eliminated debts, the order provides general information about "nondischargeable debt" that doesn't go away in bankruptcy.

For instance, the bankruptcy discharge will explain that you'll remain responsible for paying the following:

  • 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).

After the court issues the discharge, creditors holding nondischargeable debts can continue collection efforts. Although 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.

Learn which debts you cannot discharge in Chapter 7 and which debts you cannot wipe out in Chapter 13.

Other Debts the Bankruptcy Court Might Not Discharge

Other debts might also be nondischargeable if the creditor filed and won a bankruptcy lawsuit asking that you remain responsible for paying the obligation. Obligations arising from fraud committed by the debtor or debts considered "presumptive fraud" are examples of the type you might have to pay after your bankruptcy case.

Also, a bankruptcy discharge won't eliminate a lien that a creditor might have on your property. A lien allows the creditor to repossess and sell the collateral to recover at least some of the money you borrowed if the debt remains unpaid, even if the court discharged the debt in your bankruptcy case.

Some liens can be removed, however, even after the closure of the bankruptcy case. Learn more in What Happens to Liens in Chapter 7 Bankruptcy?

When the Court Will Deny a Bankruptcy Discharge

While your matter remains open, you're responsible for cooperating with the trustee, even if you've already received your discharge. If you fail to cooperate with the court or the trustee, are not truthful in your paperwork or testimony, fail to turn over assets, or are otherwise undeserving of a discharge, the court can deny your discharge. Learn more about objections to a bankruptcy discharge.

The Bankruptcy Discharge Doesn't Close the Case

The goal of bankruptcy filers is to get the discharge, and as far as they're concerned, the case is over once received. But that's not exactly how it works.

In most cases, the bankruptcy court will close the case a few days or weeks after sending the discharge. However, it can take longer because a bankruptcy case must remain open until all outstanding issues are resolved.

In a Chapter 7 case, the bankruptcy trustee responsible for managing your matter could have several outstanding issues. For instance, the trustee must finalize bankruptcy litigation, sell property, and disperse funds to creditors before the bankruptcy court closes the case. In complicated cases, a Chapter 7 case might end two to eight months after you receive the bankruptcy discharge. However, courts frown on trustees keeping Chapter 7 cases open much longer.

In Chapter 13 bankruptcy, you'll receive the discharge after completing the three- to five-year repayment plan. The court will close the case a few weeks later.

Keep Your Discharge Order Close After Bankruptcy

A creditor who wrongfully attempts to collect a discharged debt is subject to paying for any resulting losses. Still, it's best to avoid the headache of bringing a creditor to task when possible.

If a creditor calls, provide the bankruptcy case number, filing date, and discharge date. The creditor will verify that you discharged the debt in bankruptcy and that it is no longer collectible.

It's also a good idea to keep your discharge paperwork nearby for other reasons. For instance, a lender might ask for a copy if you apply for credit or a home mortgage.

Finding Information on Your Bankruptcy Discharge Order

You'll find the filing date and case number at the top of almost any document you receive from the court. The discharge date will appear on the left-hand side of the discharge order immediately next to the issuing judge's name (you'll find the case number in the top box).

Why does the filing date matter? Qualifying debts that you incur before filing for bankruptcy are eligible for discharge. The discharge order won't include any obligations that arise after filing for bankruptcy.

Why does the discharge date matter? Just because you file for bankruptcy does not mean you'll receive a discharge, as discussed above. Providing the discharge date will help you resolve a collection issue more expediently because it proves you're no longer responsible for paying qualifying debt.

Need More Bankruptcy Help?

Did you know Nolo has made the law accessible for over fifty years? It's true, and we want to ensure you find what you need. Below, you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

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Helpful Bankruptcy Sites

Department of Justice U.S. Trustee Program

United States Courts Bankruptcy Forms

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

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