Ohio Bankruptcy Law - "What is a discharge in bankruptcy?"

Under 11 U.S.C. 727, a discharge is a release of liability in favor of the debtor which applies only to specific debts appearing within schedules filed with the court.. Debts that must be listed within schedules include many common consumer obligations: loans, notes, credit cards, accounts payable, and contractual obligations. A discharge terminates obligations. No further payment are required.

An order of the court granting discharge acts as a federal injunction directed to each listed creditor, prohibiting further action to collect the debt, claiming the debt, or representing to any person or organization that the debt remains valid. Lawsuits are banned. All actions for collection are prohibited, including all phone calls requesting payments of any kind.

Ohio Bankruptcy Law - Collateral

Be aware that debts secured by valid liens on collateral are not fully discharged in an Ohio bankruptcy. Creditors retain rights to recover collateral, up to the value of the lien, but may not collect any amount owed beyond the lien value. In the most basic sense, a bankruptcy discharge charges off only unsecured obligations, including the unsecured portion of debts secured by collateral.

Debtors may selectively choose to repay any debt after discharge. Post discharge payments are voluntary. A post-discharge payment of a portion of a discharged debt, if made, does not act as a reaffirmation of the debt and no further payments are required.

The operation of law pertaining to federal debt relief is complex. State law statutes, federal rules, and decisions rendered by courts combine to establish a local standard for Ohio Bankruptcy Courts. Anyone who considers filing should, at a minimum, balance short term requirements to long term benefits. Each debtor is different. The most valuable benefits are a personal choice, with availability dependent upon the application of law to unique circumstances.

Back to Ohio Bankruptcy Lawyer FAQ contents.