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If you have high debt and cannot pay it off, bankruptcy can offer a welcome relief to constant calls and letters from creditors. And depending on what type of bankruptcy you file, you can even have some of your debt cleared through discharge.

When a bankruptcy court discharges your debt, creditors can no longer collect it. A discharge can mean that you no longer have to struggle to pay certain debts.

What is discharge?

When a bankruptcy court files a discharge on your debt, the court sends a notice to your creditors. The discharge notice lets them know that you no longer have an obligation to pay the debt you owe them. If they do continue to try and collect the debt, the bankruptcy court can charge them with contempt.

Chapter 7 versus Chapter 13

If you file a Chapter 7 bankruptcy, courts discharge most of your debt. This action gives you a fresh start to start over without excessive debt dragging you down. However, not all debt is dischargeable.

In Chapter 13, you will make a plan to pay off most of your debt over three to five years. Once you fulfill your plan, courts can discharge the debt left over.

What is exempt from a bankruptcy discharge?

You can’t discharge all your debt. Child support, alimony, some taxes and fines from criminal activity are among the debts you cannot wipe away. If you don’t list a debt when you file bankruptcy, you cannot discharge it. You also cannot discharge student loans.

Bankruptcy discharge helps you start over

Discharging debt can help you start over fresh. Bankruptcy is a relief from debt that you can no longer manage. By discharging your debt, bankruptcy courts give you a chance to rebuild your finances for your future.