Bankruptcy Basics: What Does It Mean If My Case Is Discharged?

by Karen Oakes, Esq.

June 21, 2007

At the end of the bankruptcy case (about 110 days for Chapter 7 cases; anywhere from 3 years to 5 years for a Chapter 13), the judge issues a Discharge Order. Generally, with this Order is a provision that the case is now closed, too. When a debtor receives this Order, this means that the creditors can no longer try to collect on certain debts, such as unsecured loans, credit cards, personal bills, medical bills, etc. (There are some debts that survive bankruptcy, such as priority debt or student loans. Secured debts? It all depends on what is securing the debt-what kind of property? If it is a car loan, the creditor cannot collect on the loan, but the creditor still has an interest in the car and can collect the car if it is not paid for. Houses? Creditor still has an interest in the house and can foreclose on the house if the debt is not paid. However, those creditors cannot come after the debtor for any balance owing, unless the debtor has reaffirmed the debt.

A Discharge Order is an important document. It proves that you completed your bankruptcy case and that you are entitled to a fresh start. Sometimes creditors, even though the law says they cannot collect on a debt, will sell your debt (with thousands of other uncollectible debt) to a debt collection company. That company “may” try to collect the debt. Every year, thousands of people pay debts that they legally do not have to pay under pressure from these debt collectors. If you are contacted by a debt collector after your bankruptcy, regarding a debt that you believe was covered by the Discharge Order, see an attorney experienced in discharge violation cases immediately. You could be entitled to damages and that creditor is stopping you from obtaining your fresh start.

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I'm a consumer protection lawyer in Oregon, working with people in Klamath; Lake; Jackson; Josephine; Curry; and Deschutes County. I speak regularly on bankruptcy and consumer protection issues nationwide.

Last modified: January 23, 2010