The ultimate goal of the bankruptcy debtor. Discharge enjoins creditors from prosecuting most and sometimes all claims they may have with respect to the debtor’s prepetition obligations. In Chapter 7, debtors who are entities (rather than individuals) are not entitled to a discharge. In Chapter 11, discharge is available to both individuals and entities, and, generally, upon confirmation of a plan, prepetition claims against the debtor are discharged. Following confirmation, the debtor’s obligations to its creditors going forward are governed by the specific terms and provisions of the plan. Discharge is merely an injunction, and does not “eliminate” prepetition obligations; accordingly, guarantors’ guarantees of a debtor’s prepetition obligations remain unaffected by a debtor’s discharge, even when the debtor’s obligations to a lender are reorganized under a confirmed plan, and guarantors’ obligations may be affected only if some separate injunctive relief is granted in their favor. Discharge is not available to non-bankrupt guarantors and co-obligors, under the plain provisions of the Code, although such parties often seek discharges or injunctive relief from bankruptcy courts, even when they do not subject their own assets to bankruptcy court jurisdiction.
Bankruptcy Code §§ 523, 524, 727, 1141. See also Denial of Discharge, Nodischargeability.