What Is a Bankruptcy Discharge?

A discharge is the order most people want from bankruptcy. It can stop personal collection of debts that qualify. Some debts are excepted, including certain taxes, support, and most student loans. Honesty rules and waiting periods between cases also apply. U.S. Courts Bankruptcy Basics is a good official overview.

What you owe vs. a lien on property

Debts that often survive

Frequently asked questions

Related resources

• Can Bankruptcy Discharge Student Loans? — Can Bankruptcy Discharge Student Loans?

  Most student loans covered by § 523(a)(8) are not discharged simply by completing Chapter 7 or Chapter 13. Discharge generally requires a separate adversary proceeding and a court determination of undue hardship. The Department of Justice and Department of Education use a standardized process for many federal-loan discharge cases, but the bankruptcy judge makes the ultimate determination. In Chapter 13, the automatic stay generally limits ordinary collection while it remains in effect, but how student loans are paid during the case depends on the confirmed plan and applicable procedures.

• Can Bankruptcy Eliminate Tax Debt? — Can Bankruptcy Eliminate Tax Debt?

  Some older income-tax liabilities may be dischargeable when the Bankruptcy Code’s timing, return-filing, assessment, and other requirements are satisfied. Recent income taxes, many payroll and trust-fund taxes, and other priority or excepted tax debts generally require different treatment. Chapter 13 can provide a structured way to pay qualifying tax claims.

• Can I Buy a Car After Bankruptcy? — Can I Buy a Car After Bankruptcy?

  Yes. Buying a car after bankruptcy is common. Clearing credit-card and medical bills can free room in the budget for a payment. After Chapter 7, lenders set their own rules — the Bankruptcy Code does not ban auto loans. In Chapter 13, buying while the plan is running usually needs the trustee’s okay first. That is a normal step when you need the car for work, not a punishment.

• Converting Between Chapter 7 and Chapter 13 — Converting Between Chapter 7 and Chapter 13

  A pending bankruptcy case can sometimes be converted between Chapter 7 and Chapter 13. Eligibility for the destination chapter and the consequences of conversion still have to be evaluated. In a consumer case converting to Chapter 7, the Chapter 7 means-test analysis may apply. Conversion can also affect property, secured debts, plan treatment, trustee administration, and court fees.

• Debts Bankruptcy May Eliminate — Debts Bankruptcy May Eliminate

  Bankruptcy can discharge many qualifying unsecured debts, including many credit-card balances and medical bills. Domestic support obligations, most student loans covered by § 523(a)(8), certain taxes, and other categories are treated differently. The appropriate chapter depends on your debts, income, property, and financial goals.

• What Happens at a 341 Meeting? — What Happens at a 341 Meeting?

  After you file, you must attend a meeting of creditors. You answer the trustee’s questions under oath about your papers and what you own. Creditors may attend. In many consumer cases they do not. It is not the discharge hearing and not a trial.

• What Happens to a Co-Signer If I File Bankruptcy? — What Happens to a Co-Signer If I File Bankruptcy?

  Your bankruptcy discharge generally affects your personal liability; it does not automatically release a co-signer or guarantor. Chapter 13 provides a limited co-debtor stay for certain consumer debts, although a creditor may obtain relief from that stay in circumstances described by § 1301. A married couple may sometimes file a joint bankruptcy case. A parent, adult child, friend, or other non-spouse co-signer cannot simply be added to your joint petition and must evaluate their own legal options separately.

• What Is the Automatic Stay in Bankruptcy? — What Is the Automatic Stay in Bankruptcy?

  Filing a bankruptcy petition generally triggers the automatic stay by operation of federal law. The stay pauses many collection actions against the debtor and property of the estate, but it is not permanent. Some actions and proceedings are excepted by § 362(b), creditors can seek stay relief, and prior dismissed bankruptcy cases can limit or prevent stay protection.

• What Is the Bankruptcy Means Test? — What Is the Bankruptcy Means Test?

  The means test looks at household income to see whether a consumer Chapter 7 case looks like you can repay creditors. It starts by comparing income to Census medians for your state and household size. If you are over the median, a second form applies allowed expenses. Chapter 13 uses related forms for plan length. Median-income figures and expense standards change periodically, so the correct U.S. Trustee Program tables should be matched to the expected filing date.