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What is a discharge in bankruptcy?

Friday, May 21, 2010 by W. Travis Garrison

Cupps & Garrison LLC, Bankruptcy Lawyers in Ohio

What is a discharge in bankruptcy?

The primary goal of most personal bankruptcy cases is to obtain a discharge of the debtor’s debts. Under the Bankruptcy Code, a discharge releases the debtor from his or her personal liability for certain specified types of debts. The debtor is no longer required to repay any discharged debts; the discharged debts are essentially wiped away.

The discharge also acts as an injunction that legally prohibits creditors from taking any action to collect a discharged debt from the debtor. This includes filing or continuing a lawsuit to obtain judgment, sending letters demanding payment, making harassing phone calls, or taking any action—or threatening to take any action—to force or coerce the debtor into paying.

In short, the discharge allows the debtor to start over with a clean financial slate and enjoy a “fresh start.”

Bankruptcy Law in Ohio

It is important to note that not all debts are discharged. For policy reasons, certain categories of debts are exempt from discharge, and the debtor remains liable for such debts even after having the rest are discharged.

For example, certain tax debts, debts for money obtained through fraud, domestic support obligations, and student loans (in certain situations) are a few examples of the types of debts that will not be discharged. Also, a valid lien, like a mortgage or a lien noted on your car’s certificate of title, that has not been avoided survives bankruptcy and will remain in place after your case is closed.

The Columbus bankruptcy law firm of Cupps & Garrison handle personal and business bankruptcy cases for individuals and businesses throughout Ohio. Please contact us for an evaluation of your financial situation.

Visit our Bankruptcy FAQ for more information.

Cupps & Garrison, LLC
35 East Gay Street, Suite 402
Columbus, OH 43215
Phone: 614-441-8603

Posted at 21:22 PM

Topic: Commercial Law