A discharge in
United States bankruptcy law, when referring to a debtor's discharge, is a statutory
injunction
An injunction is a legal and equitable remedy in the form of a special court order that compels a party to do or refrain from specific acts. ("The court of appeals ... has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in ...
against the commencement or continuation of an action (or the employment of process, or an act) to collect, recover or offset a
debt
Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The d ...
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.
[Michael Simkovic]
Risk-Based Student Loans
(2012)
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 child support, 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 United States bankruptcy law, an automatic stay is an automatic injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Under section 362 of the United States Bankruptcy ...
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:
:: (relating to liquidation bankruptcies for individuals);
:: (relating to municipal bankruptcies);
:: (relating to discharges resulting from confirmation of a Chapter 11 plan of reorganization);
:: (relating to certain family farmer or fisherman cases);
:: (relating to certain family farmer or fisherman cases);
:: (relating to certain cases involving adjustment of debts of an individual with regular income);
:: (relating to certain cases involving adjustment of debts of an individual with regular income).
The effect of the debtor's discharge is provided for at . In addition, certain limitations on the debtor's discharge are described at .
For more information on the debtor's discharge, see Bankruptcy in the United States
In the United States, bankruptcy is largely governed by federal law, commonly referred to as the "Bankruptcy Code" ("Code"). The United States Constitution (Article 1, Section 8, Clause 4) authorizes Congress to enact "uniform Laws on the subje ...
.
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 .
At the conclusion of a case the trustee (if any) may be discharged as trustee under .
References
United States bankruptcy law
Insolvency
{{US-law-stub