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Bankruptcy: effect of discharge


Discharge releases the bankrupt from all provable debts in the bankruptcy. The debts he is not released from, apart from non-provable debts, are certain debts due to the revenue authorities debts incurred by fraud, and debts incurred by seduction, matrimonial offences and the common law liability to support a wife. Where the discharge is conditional the debtor after two years, may apply to have the terms modified, but such a discharge may also be rescinded if the debtor fails to observe the conditions. An order of discharge may be accompanied by what is known as a certificate of misfortune. This states, more or less, that it was not the debtor's fault he became bankrupt.

Reference: The Penguin Business Dictionary, 3rd edt.