What is the Discharge Order?
The discharge order is a court order given at the end of a bankruptcy that requires all of your creditors that were named in the bankruptcy to stop any action to collect upon those debts. Those debts that you incurred before you filed for bankruptcy protection now can not be collected by anyone, anywhere. The Supreme Court has stated that the purpose of bankruptcy is to give people the ability to “reorder their affairs, make peace with their creditors, and enjoy a new opportunity in life with a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” The discharge is how this is done. The discharge order is what gives you your fresh start. Once you have gotten a discharge, you are free of those debts.
What does the Discharge Order protect me from?
The discharge order is located in section 524 of the Bankruptcy Code and lists specific acts that are not allowed while it is in force:
(1) voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under section 727, 944, 1141, 1228, or 1328 of this title, whether or not discharge of such debt is waived;
(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; and
(3) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect or recover from, or offset against, property of the debtor of the kind specified in section 541(a)(2) of this title that is acquired after the commencement of the case, on account of any allowable community claim, except a community claim that is excepted from discharge under section 523, 1228(a)(1), or 1328(a)(1), or that would be so excepted, determined in accordance with the provisions of sections 523(c) and 523(d) of this title, in a case concerning the debtor’s spouse commenced on the date of the filing of the petition in the case concerning the debtor, whether or not discharge of the debt based on such community claim is waived.
11 U.S.C. § 524
The discharge order itself is the same in a chapter 7 and chapter 13, but the effects can be different and take an experienced attorney to enforce. In addition, there are protections for persons who have finished their chapter 13 plans and whose lender hasn't applied payments received under the plan correctly. An experienced bankruptcy litigator will be able to guide you through the complexities of bringing a creditor to heel when they try to collect after you've received your discharge.
What does it cost?
Part of the damages a creditor pays when we successfully bring a motion for contempt to the court is the attorney's fees and costs for the work to bring the action. We charge a small up front fee upon taking the case to cover initial expenses but otherwise we get paid from the creditors upon settlement or winning in court.