Discharge In Bankruptcy

When a bankrupt person or company is legally free and clear of any obligation to repay certain debts.

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In other words, the creditor no longer has any right to collect an outstanding debt from the person declaring bankruptcy.

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Release of the Bankrupt from all provable Debts, whether then payable or not, and debts founded on a Contract, express or implied; but not a release from debts specifically excepted from discharge by the bankruptcy statute.

Bankruptcy court's order releasing a debtor from his obligations, except for obligations the debtor voluntarily agreed to assume. Although the debtor is no longer liable for discharged obligations, the bankruptcy will remain on his Credit Report for 10 years. A discharge of obligations is available only to individual debtors, but not to corporations.

The release of a bankrupt party from the obligation to repay Debts that were, or might have been, proved in a Bankruptcy proceeding.
Example: A real estate resort Developer filed for bankruptcy. He owned 2,000 unsold vacation lots, and owed $2 million on land acquisition loans. The court granted a discharge in bankruptcy for these loans and allowed the creditor to dispose of the lots.