The primary goal of most Bankruptcy cases is to get a discharge of some or all of your debts. The discharge order is an important document that will permanently protect you from future attempts to collect all debts that were discharged, and you have your important “fresh start.” It is your time to move on with your life, hopefully with far less stress. A while after your discharge, you check your credit report and you are surprised to find that all of the debts that you listed in your Bankruptcy schedules, that your lawyer (and Court order) told you were discharged, are still there, staring right at you! Did something go wrong in the case? Did your Bankruptcy lawyer forget to file something? Is the credit report wrong? Probably not. It is important to understand what a discharge does and does not do for you.
A discharge, in simple terms, means you no longer have any personal liability to pay those debts. You are forever released, and those creditors are barred from even trying to collect those debts from you. What a discharge does not do is erase your financial history. All of these debts will still be on your credit report, just as they would have been had you not filed for Bankruptcy. The difference is that your credit report will (or should) also reflect that the debts were discharged in your Bankruptcy case and have a zero balance. The purpose of a credit report is to provide an accurate picture of your credit history, and this accomplishes that goal. If some of your debts were not discharged for some reason, the report should accurately reflect the current status of the debt and your payments. Similarly, any other court records will still show court cases, judgments, liens and so on. A Bankruptcy discharge is a powerful tool even if it does not solve every problem or wipe out all negatives from your past. As an aside, keep in mind that all other rules apply to credit reports. They still must be accurate, and debts still age off the reports seven years after the last activity. As you build your credit, the debts and entries will start falling off.