The idea behind filing a bankruptcy is discharge of debts and equitable distribution of creditors’ rights. In most consumer bankruptcy cases, the discharge of debts is the primary reason for filing the case. Whether the bankruptcy is motivated by overwhelming credit card debt, medical bills that are simply too much or some other issue, most debtors anxiously await the discharge and the chance to start over that it provides. The timing of the discharge varies from case to case.
In Chapter 7, the Bankruptcy Court usually grants the discharge 3-4 months after the petition has been filed. However, the court may deny an individual debtor’s discharge in a Chapter 7 case if the debtor fails to complete “an instructional course concerning financial management,” discussed here. There are ways to get discharge by requesting a waiver of financial management course. In certain cases, however, discharge may be delayed if creditors file objections to the discharge. Under 11 U.S.C. Sec. 727(c), a Bankruptcy Trustee, a creditor, or the U.S. trustee may object to the granting of a discharge. A party with interest in the debt may request that the trustee investigate the conduct of a debtor to determine whether sufficient evidence exists to deny the discharge.
In a chapter 13 case, the discharge is granted when the debtor completes his or her repayment plan.
When the eagerly awaited discharge finally comes, the Court will issue an Order Granting Discharge. This Order will typically contain language to the effect that “the debtor is granted a discharge under section 727 of title 11, United States Bankruptcy Code.” This section of the code states that “[t]he court shall grant the debtor a discharge” unless specific exceptions apply. In most districts, the Order is accompanied by an explanation of discharge.