The examples and perspective in this article may not represent a worldwide view of the subject. (March 2015) (Learn how and when to remove this template message)
This article needs additional citations for verification. (February 2012) (Learn how and when to remove this template message)
|Bankruptcy in the|
|Bankruptcy in the United States|
|Aspects of bankruptcy law|
A discharge in United States bankruptcy law, when referring to a debtor's discharge, is a statutory injunction against the commencement or continuation of an action (or the employment of process, or an act) to collect, recover or offset a debt as a personal liability of the debtor. The discharge is one of the primary benefits afforded by relief under the Bankruptcy Code and is essential to the "fresh start" of debtors following bankruptcy that is a central principle under federal bankruptcy law. Discharge is also believed to play an important role in credit markets by encouraging lenders, who may be more sophisticated and have better information than debtors, to monitor debtors and limit risk-taking.
A discharge of debts is granted to debtors but can be denied or revoked by the court based on certain misconduct of debtors, including fraudulent actions or failure of a debtor to disclose all assets during a bankruptcy case. Some debts, such as alimony and childsupport, cannot be discharged in bankruptcy, while others, such as student loans, are difficult to discharge and are therefore rarely discharged.
The benefit of the discharge injunction is narrower than (but similar to) the benefit afforded by the automatic stay in bankruptcy.
U.S. law also provides for specialized discharges in bankruptcy (see below).
Bankruptcy discharge for the debtor
In the United States, there are generally seven kinds of debtor discharges in bankruptcy, found in the following statutes:
For more information on the debtor's discharge, see Bankruptcy in the United States.
Other discharges in bankruptcy
In the United States, with respect to taxes incurred by the bankruptcy estate (as opposed to the debtor) during case administration, a specialized discharge for the trustee, the debtor, any successor to the debtor, and (for cases commenced on or after October 17, 2005) the bankruptcy estate is provided in 11 U.S.C. § 505(b).
- Michael Simkovic, Risk-Based Student Loans (2012)