Just as all rivers run to the sea, all bankruptcy cases run to a bankruptcy discharge. Unless they don’t…which probably means that the case has been dismissed.
If you are a creditor, there is a big difference between a bankruptcy discharge and a bankruptcy dismissal.
A discharge means there is no (or modified) liability for the borrower’s debts, usually under 11 U.S.C. 727, 1141, or 1328. Simply put, a “discharge” means that the debtor wins and doesn’t owe the debt any more.
A dismissal generally means that something has gone wrong in the case (such as a payment default under a Chapter 13 Plan or some failure by the Debtor to comply with the Bankruptcy Code) and, as a result, the bankruptcy case is going to prematurely end…without a discharge. Here, the creditor wins because the debtor doesn’t get a discharge, and the debt remains due and owing.
This may be an obvious distinction, but it wasn’t to me on the first day I practiced bankruptcy law. Considering the absolutely polar-opposite results the two outcomes have for creditors, however, I learned this important lesson quickly.
Creditors Rights 101 
3 thoughts on “Creditor Essentials: The Difference between a Bankruptcy Discharge and a Bankruptcy Dismissal”