discharge in bankruptcy


Also found in: Financial.

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 ?
cc/9Q3G-65WV] (noting bankruptcy does not discharge student loan debt unless court finds undue hardship); Patrick Lunsford, Court Ruling May Pave Way for Some Student Loan Discharge in Bankruptcy, INSIDEARM (Aug.
91) Among those exceptions, the most common debts that are prohibited from discharge in bankruptcy are debts incurred by fraud or false representation, (92) child support obligations, (93) alimony obligations, (94) federal taxes or tax penalties, (95) and federal student loans or other educational loan obligations.
This means that if C holds an IRA, the IRS could levy on the account after her discharge in bankruptcy (Iannone, 122 T.
If joint debts are involved, a discharge in bankruptcy for one spouse will not eliminate the responsibility of the spouse who does not join in the bankruptcy filing.
Now the discharge in bankruptcy acts as an injunction against future collection efforts.
Such a right is not a claim in bankruptcy and, as such, is not subject to discharge in bankruptcy.
As noted above, the availability of discharge in bankruptcy legislation may create a perverse incentive for a debtor to resort to the bankruptcy regime, not for its intended objectives, but to gain the benefit of discharge.
There are no dischargable claims against a corporation, as the corporation is not entitled to a discharge in bankruptcy.
Robert Freitas, a lawyer for Coast Business Credit, Howard & Phil's largest creditor, said the new business may mean the brothers have additional capital and income to pay off the debts they are trying to discharge in bankruptcy court.
A discharge in bankruptcy shall release a bankrupt from all of his provable debts, whether allowable in full or in part, except such as
Otherwise, the court reasoned, the exceptions to discharge in bankruptcy would become open invitations to attempt to trace all bank loans to unpaid payroll taxes regardless of how and when the debt was originally incurred.