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 ?
This case presents a discrete issue: Does a defendant, who has received a discharge in bankruptcy, become a nominal party for purposes of the jurisdictional requirement found in 28 U.S.C.
27, 2014), http://wwrbankruptcy.com /2014/08/27/the-8th-circuit-opens-the-door-to-partial-discharge-of-student-loans-and-upends-the -totality-of-the-circumstances-test/ [https://perma.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.C.
(125) Jay Cohen, "The History of Imprisonment for Debt and Its Relation to the Development of Discharge in Bankruptcy" (1982) 3 Journal of Legal History 153, at 156.
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. (8) However, the legislative history indicates that equitable remedies that can be adequately satisfied in the alternative by a right to payment were meant to be included as claims.
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. If the vendor sold to a corporation, and the insider of the corporation filed bankruptcy, the vendor may still have a nondischargable claim against the individual, but must establish an alter ego claim against the insider.
unlikely to get a discharge in bankruptcy there is no purpose in