The Bankruptcy Discharge

At the end of a successful bankruptcy case, the court issues a discharge order that puts creditors on notice that they no longer have the right to collect discharge-eligible debts. It applies to those obligations the debtor incurred before filing—not bills the debtor acquires after the bankruptcy filing date. 

The discharge order also doesn’t list the specific debts eliminated in a case, as most people expect. Instead, the court uses a boilerplate bankruptcy form that lists “nondischargeable debt” types that all debtors remain responsible for paying. 

The same debts qualify for a discharge in both Chapter 7 and 13. The only exception is that Chapter 13 will eliminate a few more debts, the most notable being money owed under a marital property settlement agreement and an unsecured residential junior mortgage.

Fortunately, most Chapter 7 filers receive a discharge without a problem. Creditors don’t usually object to a discharge unless it’s suspected that the debtor incurred the debt through fraud. Such cases are rare, however—possibly because most people who’ve engaged in fraudulent conduct steer clear of bankruptcy (the penalties can be steep). 

Getting a discharge can be more challenging for a Chapter 13 filer, but only because circumstances often change during the three- to five-year repayment plan period.