CHAPTER 9 - § 9.16 • DISCHARGE

• Jurisdiction: Colorado

§ 9.16 • DISCHARGE

An individual's goal in filing a bankruptcy petition is usually to receive a discharge. A discharge is a bankruptcy court order that prohibits creditors from taking any action to collect on a discharged debt from a debtor personally. In essence, the discharge replaces the automatic stay in barring creditors from suing, garnishing wages, asserting a deficiency, or taking any other action to collect on a pre-petition debt of the debtor. 11 U.S.C. § 524(a)(2). Creditors who take collection actions in violation of a discharge order may be required to pay a debtor's damages and attorney fees as a result. Paul v. Iglehart (In re Paul), 534 F.3d 1303 (10th Cir. 2008).

A discharge does not, however, affect a security interest or lien on property. Accordingly, a creditor still has the right to foreclose a home mortgage or repossess an automobile. The creditor is prohibited, however, from pursuing any deficiency personally against the debtor.

A...