What Is a Bankruptcy Discharge When Does It Happen?

Bankruptcy court judge's desk with gavel and liberty scales
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A bankruptcy discharge is a court order issued at the end of Chapter 7 or Chapter 13 bankruptcy hearing case. The court order will relieve you from your obligation to pay a debt. You must complete all the requirements for your bankruptcy case to receive a discharge.

Once a debt has been discharged, the creditor is prohibited from taking collection action on that debt—ever again. That includes calling, sending letters, or suing you over the debt. However, creditors and lenders can enforce any liens attached to secured debts that they hold against you. They can still repossess and sell any property attached to a loan or lien, even after the associated debt has been discharged.

Chapter 13 Bankruptcy vs. Chapter 7

Chapter 13 allows some debts to be discharged that can't be discharged in Chapter 7. It includes marital debts created in a divorce agreement (exclusive of spousal support or alimony), court fees, certain tax-related debts, condo and homeowners' association fees, debts for retirement loans, and debts that could not be discharged in a previous bankruptcy.

What Debts Are Discharged?

Debts that can be discharged and the amount of the discharge all depend on whether you file Chapter 7 or Chapter 13 bankruptcy. In Chapter 7 bankruptcy, the trustee divides your nonexempt assets among your creditors, and any remaining debt will be discharged. In Chapter 13 bankruptcy, you enter a repayment plan that repays all or most of your debt. At the end of your repayment plan, the remaining debt will be discharged.

Debts that are likely to be discharged in bankruptcy include credit card debts, medical bills, lawsuit judgments, personal loans, obligations under a lease or other contract, and other unsecured debts. There are some types of debt. However, that cannot be discharged in either type of bankruptcy.

Debts That Can't Be Discharged in Chapter 7

Section 523(a) of the Bankruptcy Code describes the types of debt that may not be discharged. Debts that can’t be discharged in Chapter 7 bankruptcy include:

  • Domestic obligations like child support, alimony, and other debts owed under a marriage settlement agreement
  • Certain fines, penalties, and restitution resulting from criminal activity
  • Certain taxes, including fraudulent income taxes, property taxes that became due within the previous year, and business taxes
  • Court costs
  • Debts from a DUI charge
  • Condo or other homeowners’ association fees charged after you file bankruptcy
  • Retirement plan loans
  • Debts not discharged in a previous bankruptcy
  • Debts you didn’t list on your bankruptcy

Difficult Debts to Discharge During Bankruptcy

It is extremely difficult—if not impossible—to discharge student loans in bankruptcy. Also, creditors can ask that certain debts not be discharged including debts incurred via fraud, any luxuries you charged in the months preceding your bankruptcy, or debts arising from willful and malicious acts like arson, kidnapping, vandalism, libel, or slander.

Debts That Can't Be Discharged in Chapter 13 Bankruptcy

Under Chapter 13, you can receive a discharge for the remainder of unsecured debts after you’ve completed your repayment plan. However, some debts cannot be discharged under Chapter 13 bankruptcy, including the following:

  • Child support and alimony
  • Certain fines, penalties, and restitution resulting from criminal activity
  • Certain taxes, including fraudulent income taxes, property taxes that became due within the previous three years, and business taxes
  • Debts stemming from willful or malicious actions (automatically nondischargeable)
  • Debts you didn’t list on your bankruptcy
  • Debts incurred due to personal injury or death caused by your drunk driving
  • Debts arising from fraud or recent luxury purchases can't be discharged in bankruptcy
  • Student loan debt is nearly impossible to discharge in bankruptcy

How Long Does It Take to Get a Bankruptcy Discharge?

According to the United States Courts, discharge for Chapter 7, bankruptcy usually occurs about four months after the date you file your bankruptcy petition. For Chapter 13, the discharge occurs after all the payments under the bankruptcy plan have been made, which takes three to five years. If you don’t take the required financial management course, the court can deny your bankruptcy discharge.

The Process

Once your debts have been discharged, a copy of the order will be mailed to all your creditors as well as the U.S. trustee, the trustee in your bankruptcy case, and the trustee’s attorney. This order includes a notice that creditors should not attempt to collect on the debts or else they face punishment for contempt. Make sure you keep a copy of the order of discharge along with all the other bankruptcy paperwork, so you're not charged to get a copy later on. You can use a copy of these papers to correct credit report issues or deal with creditors who try to collect from you after the bankruptcy discharge.

If any creditor tries to collect a discharged debt from you, you can file a motion with the court and have the case reopened. The creditor can be fined if the court finds that the creditor violated the discharge injunction. Before going that route, try sending a copy of your order of discharge to stop the collection activity and if that doesn't work, talk to a bankruptcy attorney about taking legal action.


Unfortunately, your bankruptcy will impact any joint account holders or cosigners. While your liability for the debt is removed upon bankruptcy discharge, the cosigner is on the hook for the entire balance of the debt. Your bankruptcy protection does not extend to your joint applicants or cosigners. Creditors are still allowed to collect from (or even sue) the cosigner for the debt. However, you can voluntarily make payments on the debt to ensure that it's paid in full, especially if you received the benefit from the debt.

Credit Report

A bankruptcy discharge does not impact the credit reporting time limit for bankruptcy, which is seven years from the date of filing for Chapter 13 bankruptcy and ten years from the date of filing for Chapter 7 bankruptcy. Accounts associated with bankruptcy may be deleted from your credit report before the bankruptcy, particularly if the date of delinquency preceded your bankruptcy filing. However, the bankruptcy will continue to be listed on your credit report in the public records section for the allowed time limit.