When you file bankruptcy, the goal is to have your creditors forgive your outstanding debt or negotiate terms to pay off the debt based on a court-specified repayment plan. Discharge is a legal term that means you are not legally required to pay a certain debt. It also means that collectors can no longer take action to try to collect it.

After a bankruptcy discharge, debt lenders and collectors are no longer allowed to try to collect on the discharged debts. This means no more letters or calls and that you are no longer considered personally liable for the debt.

Does a Bankruptcy Discharge Apply to All Debts?

The short answer to this is no. For example, if you owed a lender $100,000 and have half of the debt discharged, you still owe the other $50,000. The specific type of bankruptcy you file will determine what you have discharged and what happens to other property during or after the bankruptcy process.

When it comes to your property, you may wonder what is going to happen. While you may not be personally liable for the debts that are discharged, if a valid lien is filed, it may remain in place once the debt has been discharged. What this means is that secured creditors can still enforce the lien to recover property that is owed.

What Can be Discharged During a Bankruptcy?

If you are dealing with significant debt, then bankruptcy may be a viable solution. However, before moving forward with this, you must understand the possible consequences. Keep in mind, though, that if all your debts are student loans, bankruptcy will not do much good.

With a discharge, it means that you are no longer obligated to pay off the debt. If you have a debt dismissed, it means the bankruptcy court will dismiss the bankruptcy case. This is the complete opposite of the discharge.

You can request a dismissal if you change your mind about the bankruptcy, or the court may dismiss your case if you do not qualify for it.

The types of debts that cannot be discharged (based on the law in the U.S.) include:

• Any debt not included in a court filing
• Tax-related debts
• Some cooperative or condo housing fees
• Federal student loans
• Government penalties or fines
• Retirement plan loans
• Child support, spousal support, or alimony
• Debts incurred because of injuries or damages while drinking and driving

If you are not sure if a debt can be discharged, you should ask an attorney.

Hire an Attorney to Help with Your Bankruptcy Case

When you are ready to file bankruptcy, you should consider hiring an attorney to help you with the process. They can review your case and help you understand what debts can be discharged and which ones are not eligible for this. Also, an attorney can provide advice and guidance to help you through this process – in the long run, this will help you get the desired results from your bankruptcy case.