What Is A Bankruptcy Discharge?
A bankruptcy discharge is a formal order by the Bankruptcy Court that the debtor is no longer responsible for paying certain types of debt. The most common debts that are discharged in bankruptcy include credit card bills, medical bills and deficiency judgments.
A discharge is entered after the debtor has a meeting of the creditors and after the creditors are given an opportunity to object. A discharge order is mailed to the debtor and the debtor’s attorney. Once the discharge order is in effect, creditors who were properly notified of the bankruptcy cannot attempt to collect money directly from the debtor and may face penalties for contempt if they do.
A discharge can be revoked if the discharge was obtained through fraud and the fraud was not discovered until after the discharge was granted; property of the bankruptcy estate was acquired after the discharge and was not disclosed; a court order was not obeyed; or a material misstatement was not explained after an audit.