What is a bankruptcy discharge, and what should I do with it?

Anyone enrolled in high school knows what the ultimate goal of those four years is — to graduate and earn a diploma, a key step toward the next goal in life.

For those seeking bankruptcy protection, the goal of the case is typically a discharge of most of the debts that have been troubling them. Like a high school diploma, the bankruptcy court’s discharge of your debt is symbolized by a piece of paper (nowhere near as fancy, though) that memorializes the court’s act of forgiving the bulk of your debt.

With a diploma, you can frame it, shine it up, look at it with pride everyday, or put it in a box an forget about it. I bet few people would be so callous as to purposely throw it away, however.

You should have the same basic attitude toward your discharge paperwork. It’s certainly not necessary to frame it, but debtors are well advised to keep it in a safe place, alongside passports, birth certificates, deeds, and other important life documents.

How long to keep it, you ask? Well, why not forever? What debtors certainly don’t want want is their creditors popping up years or decades later trying to collect the same old stale debt. It doesn’t happen often, but it does happen. Keeping the discharge (a one-page piece of paper) with your important effects is your defense against this. Sure, the information can be accessed through the courts if need be, but you may find that your case has been shipped to storage at a military base in the meantime, and that a steep fee needs to be paid to get it out.

In Massachusetts, in the simplest Chapter 7 case, the bankruptcy discharge is usually issued about four months after the case is filed. It is mailed to the debtor’s home in a envelope that is similar to all of the other bankruptcy court notices that get mailed out, so be careful not to miss it.

Your bankruptcy discharge in many ways IS your fresh start on a new life without debt. Don’t just throw it away.

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