Discharge In Bankruptcy
Definition - What does Discharge In Bankruptcy mean?
A discharge in bankruptcy refers to a debtor being freed from certain aspects of his or her debt obligations. Once a debt has been discharged, the creditor of the debtor is prohibited from taking any collection actions.
Justipedia explains Discharge In Bankruptcy
In the United States, an individual can file for chapter 7 or chapter 13 bankruptcy. Depending on the type of bankruptcy that is filed, debts are classified into one of two categories: dischargeable debts and nondischargeable debts. Once an individual has been discharged, he or she is no longer liable to repay the debts that have been classified as dischargeable debts. However, a valid lien can remain, which can be enforced by creditors to recover the property that is secured by the lien.