Discharge from bankruptcy is the process in which bankrupts are freed from the status of bankruptcy, which normally takes a year. However, under special circumstances the period may be shortened.
Discharge from Bankruptcy Defined
The process of discharge from bankruptcy is defined as the procedure that lifts the impositions of bankruptcy. This process is meant to free an individual from a significant portion of their debts.
Period of Discharge from Bankruptcy
The normal period of discharge from bankruptcy is a year after a person was declared to be bankrupt. The individual may also be discharged from bankruptcy earlier than this period, if the Official Receiver or Insolvency Practitioner files a notice stating that he has finished the routine inquiries in the monetary affairs of the debtor. The bankrupt individual is then notified of the discharge status.
Method of Discharge from Bankruptcy
The bankrupt individuals can be discharged of their bankruptcy after the stipulated period even if the creditors have not received any payment. Upon automatic discharge, the individuals do not follow any specific legal procedure. They may, however, ask for a certificate of discharge.
Implications of Discharge from Bankruptcy
However, if the bankrupt person had taken a secured mortgage, the creditors are entitled to the collateral and may use the property in any way that suits them financially. Also, the assets that had been taken from the individual at the time of bankruptcy are not returned.
Last Updated on : 10th July 2013