Discharge In Bankruptcy

AAA

DEFINITION of 'Discharge In Bankruptcy'

A permanent order that releases the debtor from personal liability for certain specified types of debts, thereby releasing the debtor from any legal obligation to pay any discharged debts. The discharge in bankruptcy order also prohibits creditors from taking any form of collection action on the discharged debts. However, valid liens on specific property to secure payment of debts that have not been discharged, will remain in effect after the discharge, and a secured creditor has the right to enforce the liens to recover such property.

INVESTOPEDIA EXPLAINS 'Discharge In Bankruptcy'

All debts are not discharged in a discharge in bankruptcy. In fact, there are 19 types of debt that are exempted from discharge for bankruptcy filings under chapters 7, 11 and 12, with a more limited list of exceptions applicable for Chapter 13 filings.

The timing of the discharge also varies, depending on the chapter under which the bankruptcy filing is made. In individual cases under chapters 11, 12 or 13, the court typically grants the discharge as soon as practicable after the debtor completes all payments under the plan.

RELATED TERMS
  1. Corporate Undertaker

    An informal term for liquidator. As the name implies, a corporate ...
  2. Adjudication

    A legal ruling or judgment. Adjudication can also refer to the ...
  3. Charging Order

    A court-authorized right granted to a judgment creditor to attach ...
  4. Bankruptcy Trustee

    A person appointed by the United States Trustee, an officer of ...
  5. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  6. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form ...
Related Articles
  1. Student Debt: Is Bankruptcy The Answer?
    Budgeting

    Student Debt: Is Bankruptcy The Answer?

  2. Bankruptcy Filing Changes That Could ...
    Options & Futures

    Bankruptcy Filing Changes That Could ...

  3. Declaring Bankruptcy Is No Easy Out ...
    Insurance

    Declaring Bankruptcy Is No Easy Out ...

  4. Distressed Debt An Avenue To Profit ...
    Bonds & Fixed Income

    Distressed Debt An Avenue To Profit ...

comments powered by Disqus
Hot Definitions
  1. Last In, First Out - LIFO

    An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold ...
  2. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  3. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  4. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  5. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  6. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
Trading Center