Usually, at some point in an initial bankruptcy consultation, the client will ask what is a bankruptcy discharge? Truly, this is one of the best questions a client can ask since it represents the whole purpose and goal of filing bankruptcy. The discharge, or discharge order, is the final event in a bankruptcy case and acts as the official release of the debts and obligations of the debtor in the bankruptcy case.
At this time, the debtor is relieved of his or her legal obligation to repay any of the debts legally discharged in the bankruptcy case. Any debts to which the discharge order does not legally apply must be repaid according to the terms of the original payment agreement for the debt in question.
A discharge in bankruptcy releases the debtor from personalized liability for those debts that federal law considers dischargeable under the applicable chapter of the Bankruptcy Code. A discharge order entered by a bankruptcy court permanently prohibits the creditors of the debtor from any collection activities for discharged debts, including lawsuits, correspondence, and all types of communication.
When a debtor discharges a debt, the debt’s obligation to be repaid is extinguished, and the underlying creditor is prohibited from taking any action to compel the debt’s repayment. In this circumstance, it’s important to know that any cosigner, guarantor, or surety of the debtor for the debt will still be obligated to repay the debt. Equally crucial is the fact that any property that serves as underlying collateral for a debt may still be repossessed if the loan is not repaid.
One of the Morrison Law Group’s qualified and knowledgeable bankruptcy attorneys can answer any bankruptcy debtor’s questions about any relevant bankruptcy law. The Morrison Law Group can also help if you just want to talk about Chapter 7 or Chapter 13 bankruptcy options. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.
