What Is A Bankruptcy Discharge?
A bankruptcy discharge ends your personal liability for certain types of debts. That means you are no longer legally required to pay any debts that are discharged.
The discharge is permanent - in other words, it last forever - and prohibits your creditors from taking any form of collection action on the discharged debt. Collection actions that are illegal include the following:
filing a lawsuit against you for collection of a discharged debt;
calling or writing letters seeking collection of the debt;
contacting you in person; or
continuing to report the debt as due and owing on your credit report.
Though you are not personally liable for discharged debts, a valid lien in the bankruptcy case (such as a car loan or home mortgage) will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien. In other words, the car lender can still repossess the car if you fail to make payments or the mortgage company can still foreclosure if you fall behind after bankruptcy.
A bankruptcy discharge is the reason several people file for bankruptcy. However, it is extremely important to know exactly what debts are discharged and when to expect the discharge to occur. It is also equally important to remember that every bankruptcy case is unique as are the associated discharges.
