Bankruptcy Discharge

The point of a bankruptcy is a discharge. A discharge is a legal defense to paying back a debt which basically means that you do not owe the debt. The automatic stay that arises upon the filing of the bankruptcy acts like a preliminary injunction to collecting a debt against you and your property. The discharge order issued at the end of the bankruptcy turns the preliminary injunction of the stay into a permanent injunction against collecting a debt against you ever again

Discharged debts can be voluntarily paid back, however legally discharged debts can never be collected upon. That means that you can pay the creditor back if you feel like it but the creditor can never ask you or force you to pay back a discharged debt.

Some debts such as student loans and some tax debt are non-dischargeable. That means that at the end of the bankruptcy you will still owe those debts. There are other non-bankruptcy alternatives to dealing with those debts which will be discussed in other areas of the website or in the blog.

Most liens ride-through bankruptcy. This means that if the debt is secured by a piece of property like a house or a car and the lien is not specifically removed during the bankruptcy (lien striping) then that piece of property will still owe the debt even though the individual does not. Some exceptions to this rule apply in Chapter 13.