One of the most important moments in a bankruptcy case is the discharge order. This is the court order that officially clears qualifying debts and gives you the legal protection you filed bankruptcy to receive. While many people hear the word “discharge,” they are not always sure what it actually means or what happens when it is entered.
A discharge order is a written order from the bankruptcy court that permanently eliminates your legal liability to pay your debts to the extent to which they are dischargeable. Once the order is entered, creditors covered by the discharge are no longer allowed to collect from you. This includes phone calls, letters, lawsuits, wage garnishments, and any other attempt to recover those debts.
In a Chapter 7 case, the discharge is typically entered about three to four months after the case is filed, assuming there are no objections or delays. The discharge is the next step after the Meeting of Creditors, also known as the 341 meeting. You do not need to attend a hearing or take any additional action for the discharge to be entered. If everything in the case is in order, the court issues it automatically.
When we use the term ‘to the extent to which your debt is dischargeable’ we are referring to credit cards, medical bills, personal loans, old utility balances, and certain judgments. Some debts are not discharged, including most student loans, recent taxes, child support, and alimony. Secured debts, like car loans and mortgages, are handled differently. While your personal responsibility for those loans may be discharged, the lender can still enforce its rights against the property if payments are not made.
Once the discharge order is entered, it is permanent. Creditors cannot later decide to collect again, even years down the road. If a creditor tries to collect a discharged debt, they may be violating federal law and could face serious penalties. The discharge order is your legal shield moving forward.
It is important to keep a copy of your discharge order in a safe place. You may need it in the future if a creditor makes a mistake, if you apply for certain loans, or if questions come up about old debts that should no longer be owed.
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A bankruptcy discharge does not erase all financial obligations, but it does provide a clean break from overwhelming debt and a chance to move forward. When the time is right, or when you are ready, reach out to Minnesota’s MOST Kind and Helpful bankruptcy law firm by going now to www.lifebacklaw.com. You will be so happy you did.
