THE EFFECT OF DISCHARGE-WAIVER-DEBTS NOT DISCHARGED
The Bankruptcy Code prohibits collection against a debtor once a debt has been discharged in a bankruptcy. This applies to debts that arose prior to the date the bankruptcy was filed. If the creditor has a lien against an asset of the debtor and the lien attached prior to the bankruptcy filing and the lien was not avoided in the bankruptcy, only the debtors personal liability is discharged. The lien remains and the creditor may proceed against the asset after the bankruptcy is concluded. A debtor will be personally liable to continuing charges for association dues or condominium maintenance or other charges which occur after the bankruptcy is filed if the debtor retains the asset. This occurs because these are post filing debts. The bankruptcy discharges only debts which existed before the bankruptcy filing.
A discharge in a bankruptcy case voids any judgment obtained at any time to the extent that it determines the personal liability of a debtor for a claim that arose before the bankruptcy filing.
The discharge prohibits the continuation of any enforcement actions against the debtor as to any claim that arose before the bankruptcy filing.
The discharge does not affect enforcement actions against third persons. In some instances enforcement actions against third persons are prohibited during the bankruptcy proceeding. Consult your bankruptcy attorney for advice on these issues.
The effects of discharge are governed by the provisions of section 524 of the Bankruptcy Code.
WAIVER OF DISCHARGE
Generally waiver of discharge provisions executed by a debtor before the bankruptcy filing will be inoperative.
EXCEPTIONS TO DISCHARGE – Discharged in a Bankruptcy
Some of the common types of debts which are not discharged in a chapter 7 bankruptcy case are:
- Debts for most taxes;
- Debts incurred to pay nondischargeable taxes;
- Debts that are domestic support obligations;
- Debts for most student loans;
- Debts for most fines, penalties, forfeitures, or criminal restitution obligations;
- Debts for personal injuries or death caused by the debtor’s operation of a motor vehicle, vessel, or aircraft while intoxicated;
- Some debts which were not properly listed by the debtor;
- Debts that the bankruptcy court specifically has decided or will decide in this bankruptcy case are not discharged;
- Debts for which the debtor has given up the discharge protections by signing a reaffirmation agreement in compliance with the Bankruptcy Code requirements for reaffirmation of debts; and
- Debts owed to certain pension, profit sharing, stock bonus, other retirement plans, or to the Thrift Savings Plan for federal employees for certain types of loans from these plans.