What is the difference between eliminating debt and discharging debt for bankruptcy? 1 Answers as of October 29, 2010I was looking at one of the other answers to a bankruptcy question, an attorney said this, "Bankruptcy does not eliminate debt. It discharges the legal obligation to pay on a debt." I do not understand. What is the difference?
The Law Office of Mark J. Markus | Mark Markus
I'm not sure it is an important distinction for most people, but elimination of a debt presumes payment of the debt or the non-existence of it. If the debt never existed or was paid in full, it alters the creditors ability to claim certain tax deductions. Moreover, a discharge can be revoked, so the debt would still be there if that occurred. There may be other distinctions, but that is all I can think of off the top of my head.
Answer Applies to: California