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 ?
Thurmond (R-South Carolina), referred to "the current ambiguity in the Bankruptcy Code" and stated: "It is necessary to correct a line of cases in which courts have held that future payments by the debtor to a community association are discharged in bankruptcy." (17) Thus, Congress may not have agreed with Rosteck, but only acknowledged "ambiguity." The purpose was not to ratify Rosteck, but to overturn it.
John Delaney, D-Md., introduced bipartisan legislation Friday to allow student debt to be discharged in bankruptcy.
Generally, student loans aren't discharged in bankruptcy, leaving borrowers with the debt after they've gone through the process.
One advantage of an OIC is that certain items can be abated that cannot be discharged in bankruptcy. "Maybe an offer-in-compromise is your best collection alternative and the IRS can make a decision on that," he said.
Even so, debtors continue to attempt to have their student loan debt discharged in bankruptcy. Because of the difficult standard put in place by Congress, commonly referred to as the "undue hardship" requirement, this requires some creative arguments on the part of these debtors to convince a court that their student loan debt imposes enough of a hardship that it could be categorized as "undue." (11) In addition to its non-dischargeability, student loan debt can impose different obstacles on borrowers, depending on whether the debt agreement is for federally or privately funded student loans.
(92) If the illness affects the debtor's ability to pay on their federal student loans for the extended period as required, then the possibility of having those discharged in bankruptcy for illness is more likely than any other possible reason.
The district court reversed and remanded the bankruptcy court and permitted the debt to be discharged in bankruptcy, thereby allowing Van Dyn Hoven to avoid personal liability for the corporation's payroll taxes.
(3) Should tax debt be able to be discharged in bankruptcy?
* How tax debts may be discharged in bankruptcy depends on the type of proceeding.
Certain debts cannot be discharged in bankruptcy. These include child support, maintenance, some student loans, and recent taxes.
Debtors' cost of filing for bankruptcy is assumed to be [C.sub.p] and the amount of debt discharged in bankruptcy is [D.sub.p], where the p subscripts indicate pre-BAPC-PA values.
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."