A bankruptcy discharge is a court order that releases an individual or business from specific debts and obligations they owe to creditors.
In other words, it's a legal process that eliminates the debtor's liability to pay certain types of debts they owe before filing the bankruptcy case.
This means that the debtor can have a fresh financial start and move forward without the burden of overwhelming debt.
For example, if the debtor sells a property lien, the secured creditor is entitled to receive payment from the sale.
Some bankruptcy courts may use the PACER system, where the debtor can access the discharge order electronically.
[5]The history of bankruptcy law in the United States dates back to the early colonial era.
4 of the U.S. Constitution empowered the federal government to create and oversee a national bankruptcy law.
This law provided for both voluntary and involuntary bankruptcy and allowed for the discharge of certain debts.
To object to a discharge, a creditor must file a complaint before the deadline outlined in the notice sent by the bankruptcy court.
If the debtor fails to complete a required personal finance course after filing a Chapter 13, they will be ineligible for their discharge.
In Chapter 11, 12, and 13 cases, the court can cancel the order if the debtor receives a discharge because of fraud.