Discharge In Bankruptcy Legal Meaning and Definition

Here is a simplified definition of the legal term Discharge In Bankruptcy.

Discharge In Bankruptcy (noun)

A "discharge in bankruptcy" refers to the official order issued by a bankruptcy judge at the end of bankruptcy proceedings. This order forgives or eliminates the remaining debts that the individual or corporation cannot afford to repay, essentially freeing them from these financial obligations. However, certain kinds of debts, such as child support, alimony, taxes, and debts from fraudulent or illegal actions, aren't typically included and must still be repaid. This process often results in financial loss for unsecured creditors.