Discharge Injunction
When you receive your bankruptcy discharge, an injunction goes into effect by operation of law. This injunction, called the Discharge Injunction, gives you many of the same protections that were given to you by the bankruptcy stay during the pendency of your bankruptcy case. With respect to all of your debts that have been discharged by your discharge, the Discharge Injunction prohibits creditors from attempting to hold you personally liable for a debt. Where applicable, the Discharge Injunction will stop harassing phone calls from creditors and debt collectors and will stop other types of creditor action attempting to hold you personally liable for a debt.
Discharge Injuction for Married Couples
The Discharge Injunction offers important protections for married persons. If you are married and are filing bankruptcy alone without your husband or wife, when you obtain a discharge the Discharge Injunction will protect the community property of your spouse against claims of creditors arising from community debts. Married couples filing bankruptcy should consult with an attorney as to whether the filing by one spouse will be sufficient to protect both spouses.
Lender's Lien Rights Survive Discharge
The Discharge Injunction only prohibits your creditors from suing you personally. It does not prevent them from exercising their rights under a security interest or lien, such as a deed of trust against your home.
For example, when you take out a home loan, you: (A) sign a promissory note evidencing your home loan debt and agreeing to be personal liable for payment of the loan; and (B) sign a deed of trust giving your lender a security interest (a lien) against your home. When you obtain a discharge, your personal liability for the loan is eliminated. The Discharge Injunction then prohibits your lender from suing you personally to collect the loan debt. However, your lender still retains its lien and can foreclose if payments are not timely made on the loan.
Under appropriate circumstances, your lender's lien can be physically removed from your home or other property by doing a lien strip of the lien. A bankruptcy attorney can explain your options and whether the remedy of lien stripping is available to you.
