A discharge in a bankruptcy case releases the debtor from personal liability for certain debt obligations. Legally, the debtor is no longer required to pay all the debts that have been properly discharged. The discharge order issued by the bankruptcy court judge is an order permanently preventing and barring the debtor’s creditors from taking any form of collection action on debts that have been discharged, including all legal action and communications with the debtor, such as harassing telephone calls, letters, and personal contacts.
After a bankruptcy discharge is granted by the bankruptcy court, debtors are not personally liable for any of the discharged debts through the bankruptcy. However, if the creditor has a validly secured lien that has not been avoided or stripped in the bankruptcy, the creditor will still have a valid lien against the secured property. This usually occurs with homes that have mortgage loans and vehicles where there are secured vehicle loans. These creditors may still enforce their liens, meaning they can recover the property if payments are not made to these creditors. However, if these secured creditors repossess or foreclose the secured property this is the creditors’ only recourse. These creditors cannot take the property back and then sue the debtor for any shortfall or deficiency after the property is sold and the proceeds are applied to the loan balance. Because of the discharge, the debtor is protected personally from further collection action in these situations.