The bankruptcy discharge order is the document that is signed by the judge to tell creditors that they can no longer collect a debt from you. This means that a creditor can no longer sue you, garnish your wages, attach your bank account, or make any other attempt to try to recover money from you. Creditors are not allowed to contact you by mail, phone, or any other method, after the discharge order has been signed. Creditors who violate the discharge order can be required to pay damages and/or attorney’s fees.
In a chapter 7 case, you are entitled to get a discharge as long as:
• you have not received a discharge in another case in the last 8 years
• you completed a financial management course, and
• you did not take any steps to defraud your creditors or the bankruptcy court.
In a chapter 13 case, you are entitled to a discharge as long as:
• you have made all of your payments under the plan,
• paid all of your child support and alimony payments,
• completed a financial management course,
• have not had a chapter 7 discharge within 4 years of filing your chapter 13, or a chapter 13 discharge within 2 years of filing the current chapter 13 case.
Are all debts discharged?
No, not all debts are discharged. Some debts, such as child support and alimony, student loans, some taxes, and criminal fines, penalties and restitution orders, are not discharged. In some cases, if you did not properly list a debt, you will still be liable for it. You are also personally liable for debts for death or personal injury caused while drunk driving. A discharge will not prevent a creditor from collecting a debt from someone else who agreed to pay the debt, such as a co-signer.
There are some instances where a creditor will sue in you the bankruptcy case to have the debt to that creditor declared not to be discharged. If that has happened in your case and the judge ruled against you, you will still be personally liable for payment of that debt. This does not happen very often and your attorney should have discussed this with you during your case.
In a chapter 7 case, you are also still personally liable for any debts that you reaffirmed. These are debts that you want to keep paying, such as car loans or mortgage payments. If you signed papers agreeing to keep paying, then those debts are not discharged. A discharge does not prevent you from paying a debt voluntarily.
If a creditor has a lien, the creditor may enforce the lien after discharge. This means that a creditor may be able to repossess your car or foreclose on your house. Sometimes, your attorney can file papers to have a lien removed. Usually, this is done for liens placed on your property after you were sued. If this was done during your case, then the creditor is not able to enforce the lien after the discharge.