The bankruptcy discharge is a court order that releases you from personal liability on your dischargeable debts. In fact, receiving a Bankruptcy Discharge Order from the bankruptcy court is the goal when you file for bankruptcy. Your discharge is what actually gets you out of debt.
While you are no longer legally required to pay back debts that are included in your bankruptcy discharge, it is important to understand that the discharge only applies to you. What does this mean in practical terms?
If you have a co-debtor (someone who also owes the debt), they will still be legally obligated to pay back the debt because your bankruptcy discharge only applies to you.
If you have secured debt, such as a house or car, the debt will remain attached to the secured property. Your bankruptcy discharge applies to your personal liability to pay back the debt, but the creditor’s lien on the secured property remains. If you want to retain the property you will have to continue to make the monthly payments until the debt is paid off.
Discharge Does Not Affect Nondischargeable Debts
Bankruptcy discharge applies to dischargeable debts, including credit cards, medical debts, personal loans, and other consumer debts.
Your bankruptcy discharge does not apply to debts that are deemed nondischargeable by the Bankruptcy Code. Debts that are nondischargeable are not erased by bankruptcy, and you are legally liable to pay them back after receiving a bankruptcy discharge. Nondischargeable debts include student loans, some taxes, back child or spousal support, as well as some other types of debt.
Discharged Debts Are Erased Forever
When a debt is discharged through bankruptcy, it is erased forever. Unless you signed a reaffirmation agreement during the course of your bankruptcy or take some other affirmative action to bring a debt back to life, your discharged debts are gone for good. Further, the creditors of discharged debts can never legally attempt to collect payment on those debts.
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Find out more about Bankruptcy in our guide: All About Bankruptcy.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.