What Debts Are Discharged by Bankruptcy?

For bankruptcy purposes, the term discharge refers to the legal eradication of a debt. A debt that is discharged can no longer be enforced against the debtor; however, any liens securing the

Normally, a bankruptcy discharge means that the individual debtor’s financial liabilities are erased or wiped out. When a discharge is granted, it protects the debtor from personal liability on the discharged debt. However, a discharge is only allowed for certain debtors and for certain debts. For example, non-individual debtors cannot obtain a discharge in a Chapter 7 bankruptcy. Additionally, if a partnership or corporate debtor is liquidating under Chapter 11, and will cease operations upon completion of the plan, the debtor cannot receive a discharge.

Debtors may be deprived of a discharge if they’ve committed fraud against the court by lying, being uncooperative, or concealing or destroying estate property. In these cases, debtors are denied bankruptcy and will remain liable for pre-petition debts.