When a person's petition in bankruptcy is granted in Ohio, he or she will have the unsecured debts owed discharged at the close of the bankruptcy estate. Secured debts, such as a mortgage or car loan, will remain and secured creditors may continue to enforce those obligations after the estate is closed.
Unsecured debts that are discharged, however, are unenforceable. That means that, while those debts still exist, the person's unsecured creditors may take no action in an attempt to collect on them. They are legally forbidden from calling to collect on the debt, sending letters regarding the debt, filing civil lawsuits or attempting to enforce civil judgments obtained prior to the bankruptcy's filing.
Debtors, however, are not prohibited from deciding to pay discharged debts of their own free will. Sometimes, a debtor will want to do this in the event the discharged debt was owed to a friend or relative. If a creditor tries to secure such a promise to pay through prohibited collection activities, though, the creditor can be held in contempt of the bankruptcy court's injunction against collection activities. Employers are also forbidden from taking negative employment actions against the debtor because of his or her bankruptcy discharge.
Certain types of unsecured debts, including back taxes and student loan debt, will not be discharged in bankruptcy in most cases. Consequently, student loan lenders may continue to collect on that debt after a discharge although the automatic stay may temporarily halt collection activities. A bankruptcy attorney might be able to review his or her client's individual case and make a recommendation regarding the best option.