What is a discharge in bankruptcy, and what does it actually do?

What changes when the discharge is entered?

You are no longer legally required to pay the discharged debts. Creditors are barred from any form of collection action on them, including legal action and contact such as telephone calls, letters and personal visits.1

The discharge works as a court order against collection, not just as a defense you would have to raise each time someone calls. It also voids any court judgment, whenever it was obtained, to the extent the judgment decides your personal liability for a discharged debt.3

When does the discharge arrive?

In a Chapter 7 case the court usually grants the discharge promptly once the time for objecting has run out, which is 60 days after the first date set for the 341 meeting. The federal courts describe the order as generally issued 60 to 90 days after that date.1 4 2

In a Chapter 13 case the court generally grants the discharge as soon as practicable after you complete all payments under the plan. The Chapter 13 discharge is somewhat broader than a Chapter 7 discharge: it can reach some debts a Chapter 7 discharge cannot, such as debts from a property settlement in a divorce.1 4 5

In both chapters you generally must first complete the debtor education course. In Chapter 7 the certificate is due within 60 days after the first date set for the 341 meeting.6 7

Unless someone objects, the discharge usually comes automatically. The clerk mails a copy of the order to all creditors, the U.S. trustee and the case trustee, and you receive a copy too.1

What does a discharge not do?

The order has limits, and most surprises after bankruptcy come from one of these.

• Excepted debts. Most taxes, child support, alimony, most student loans, court fines and criminal restitution cannot be discharged.8
• Liens. A valid lien that was not removed in the case remains, and the secured creditor may enforce it to recover the property. A judicial lien that impairs an exemption can be removed, but only if you ask the court.1 2 9
• Other people. Your discharge does not change the liability of a co-signer or anyone else who owes the same debt.3
• Later debts. The discharge only applies to debts that arose before the date you filed.8
• Debts you reaffirmed. A reaffirmation agreement is a promise to keep paying a debt that would otherwise be discharged, usually to keep a car.10

Can a discharge be denied or taken back?

In Chapter 7 the right to a discharge is not absolute. A creditor, the case trustee or the U.S. trustee may object by filing a complaint before the deadline in the notice sent to creditors. Grounds include concealing property, destroying records, perjury, violating a court order and not completing the financial management course.1

In Chapter 13, creditors can object to the plan but cannot object to the discharge once you have completed the plan payments.1

A discharge can also be revoked, for example if it was obtained by fraud or the debtor failed to disclose property that belonged in the bankruptcy estate. A request to revoke must typically be filed within one year of the discharge or, in some cases, before the case is closed.1

Is a dismissed case the same as a discharged one?

No. A dismissed case ends without the result the filer wanted: the person may have had the automatic stay for a while, but receives no discharge.11

A dismissal generally does not stop the same debts from being discharged in a later case, and it does not prevent filing again, apart from the 180-day bar that follows certain dismissals. A second discharge, though, has waiting periods.12

What if a creditor keeps collecting a discharged debt?

Many contacts after discharge are mistakes in a creditor's records. Start with the simple steps and keep the court as the backstop.

1. Tell the creditor in writing that the debt was discharged. Give the court, the case number and the date of the discharge, and enclose a copy of the order if you can.
2. Keep a record of every contact: dates, names, what was said, and copies of letters.
3. If it continues, you can file a motion with the bankruptcy court reporting the action and asking that the case be reopened. The court can sanction a creditor for violating the discharge, normally through civil contempt, which is often punished by a fine.1
4. Under the fee schedule effective December 1, 2023, the fee for reopening a case is not charged when the debtor asks to reopen because of an alleged violation of the discharge.15

This is a good moment to speak with a lawyer, because the motion has to be put to the court in the right form.

What other protection comes with a discharge?

Employers, public or private, may not discriminate against you only because you were a bankruptcy debtor or did not pay a debt that was discharged.1

The discharge does not stop you from paying a debt if you choose to. You may voluntarily repay any discharged debt, for example one owed to a relative, and you do not need a reaffirmation agreement to do it.1 8

What should you keep after the case?

Keep the discharge order and your case number somewhere safe. The order itself does not say which particular debts it covers, so keep your schedules with it.1

If you lose the order, the clerk of the bankruptcy court that entered it can provide another copy for a fee, and the order may also be available electronically through the courts' PACER system.1