What is a discharge in bankruptcy?

A discharge in bankruptcy is a court order that releases an individual from his/her legal obligation to pay certain debts. In New York, a discharge in bankruptcy releases a debtor from personal liability for certain debts, meaning creditors cannot take any further action against the debtor for repayment of the debts. When an individual files for bankruptcy, they must provide a statement to the court that lists all of their creditors, debts, assets and liabilities. The court then will review the documents and determine if a discharge is appropriate. The most common type of bankruptcy available to individuals is a Chapter 7 bankruptcy. Under this type of bankruptcy, the court may grant a discharge of unsecured debts, such as credit cards, medical bills and personal loans. When a discharge is granted, all collection efforts against the debtor must cease. Additionally, any judgments made against the debtor while the discharge was in effect become void and the debt can no longer be collected. Creditors are not allowed to contact the debtor or attempt to collect the debt in any manner. The purpose of a discharge in bankruptcy is to give the debtor a fresh financial start. This is why it is important to understand the intricacies of filing for bankruptcy in New York and the impact of a discharge on the debt.

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