What is a discharge of debts?

A discharge of debts is the legal removal of a debtor’s liability to pay certain debts. In California, the Bankruptcy Code outlines the rules of discharging debts. Dischargeable debts can include credit card balances, medical bills, and other unsecured loans. A discharge of debts does not eliminate all obligations. For example, taxes, student loans, and child support payments are not eligible for discharge under bankruptcy law. In California, the court grants a debtor a discharge of debts in a Chapter 7 bankruptcy. A Chapter 7 bankruptcy completely eliminates certain debts including credit cards, medical bills, personal loans, and other unsecured obligations. In a Chapter 13 bankruptcy, the debtor repays a portion of their debts and the court will discharge the remaining debt amount. In both cases, it is the court that grants the debtor a discharge of debts. When a debtor receives a discharge of debts, the creditors must stop all collection activities including phone calls and letters. Furthermore, creditors are prohibited from taking any legal action to collect the discharged debt. The debtor is no longer legally required to pay the discharged debt and creditors can no longer pursue the debt. The debt is considered discharged and is removed from the debtor’s credit report.

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