I am often asked: what does bankruptcy discharge mean?

Discharge means to satisfy a debt obligation. In simple terms the bankrupt is no longer responsible for the unsecured debt (there are conditions which I will discuss later in this article). By filing for bankruptcy, you are asking to be released from your unsecured debt. Once you have complied with your responsibilities in your bankruptcy, and no one has objected to your discharge, you are eligible for a discharge. This is not an automatic process for everyone. For instance, if you have filed for bankruptcy before, or did not complete the required duties, discharge is not automatic and may become a matter for bankruptcy court. We will discuss the court process and the orders the court can issue in another blog. These are just 2 of the many factors which will not allow an automatic discharge. To find out if you are eligible for an automatic discharge from bankruptcy, call or email us.

There are some debts which do not get released when the bankrupt is discharged. These are any debts due to:

a) any fine, penalty or restitution order
b) any award for damages by a court in civil proceedings in respect or bodily harm, sexual assault or wrongful death
c) alimony
d) support
e) fraud, embezzlement, misappropriation, defalcation
f) liability for a dividend that a creditor would have been entitled to if they had notice of the bankruptcy, but the debt was not disclosed to the trustee
g) student loans that are less than 10 years old from when the bankrupt ceased to be a student
h) interest on any above debt.

If you have filed for bankruptcy but did not comply with the duties set out, the trustee will make an application to have him/herself discharged. Once this happens, you are still bankrupt, but because you have not received your discharge, you lose the protection of the bankruptcy and are once again responsible for you debt.

If you have any questions, please contact me.