BANKRUPTCY LAW (Discharge): A Chapter 7 Petition, and accompanying discharge, provide relief from pre-petition debts. The 9th Circuit Court of Appeal has stated:
A Chapter 7 bankruptcy discharge releases the debtor from personal liability for her pre-bankruptcy debts. . . . A discharge is the “legal embodiment of the idea of the fresh start; it is the barrier that keeps the creditors of old from reaching the wages and other income of the new . . .” If the debtor receives a discharge, the creditor will receive only its pro-rata share of the distribution of the property of the bankruptcy estate . . . . [Para.] Specifically, § 727 of the Bankruptcy Code ;. . . “discharges the debtor from all debts that arose before the date of the order for relief.” 11 U.S.C. § 727(b). The Code defines “debt” as “liability on a claim.” § 101(12). “Claim” is defined as a “right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.” § 101(5)(A). “This `broadest possible definition’ of `claim’ is designed to ensure that `all legal obligations of the debtor, no matter how remote or contingent, will be able to be dealt with in the bankruptcy case . . . .'” Boeing N. Am., Inc. v. Ybarra (In re Ybarra), 424 F.3d 1018, 1022 (2005).
