discharge in bankruptcy

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discharge in bankruptcy

n. an order given by the bankruptcy judge, at the conclusion of all legal steps in processing a bankrupt person's assets and debts, which forgives those remaining debts which cannot be paid, with certain exceptions. Debts for fraudulent or illegal actions, alimony and child support and taxes are not dischargeable and remain owed (but often not collectable if the bankrupt person has nothing). A discharge in bankruptcy is bad news for unsecured creditors. (See: bankruptcy)

References in periodicals archive ?
Because the debt was not incurred to pay the payroll taxes, it could be discharged in bankruptcy.
Debt tied to fraud can't be discharged in bankruptcy court, a lesson Diane M.
How tax debts may be discharged in bankruptcy depends on the type of proceeding.
If the equitable remedy gives rise to a claim under subsection B of the definition of a claim, then the obligation may be discharged in bankruptcy.
Under federal law, student loans can be discharged in bankruptcy only if repayment would impose an "undue hardship on the debtor and the debtor's dependents.
However, when a debt is discharged in bankruptcy, no income is realized.
The most common income tax situations that are not discharged in bankruptcy are the following: 1.
As a result, if an unpaid tax debt is discharged in bankruptcy, the interest on that tax is also eliminated.
Under the Bankruptcy Code, Congress requires that the IRS be given certain time periods to assess and collect taxes without threat of the taxes being discharged in bankruptcy.
Some debts cannot be discharged in bankruptcy and remain a debtor's binding obligation even if the court grants a bankruptcy discharge.
Taxes can be discharged in bankruptcy in either a chapter 7 or a chapter 13 filing.