What is The Discharge in a Chapter 11 Bankruptcy?
The confirmation of a Chapter 11 plan discharges the debtor from any debt or debts arising before the date of confirmation. After confirmation of the plan, the reorganized debtor and its creditors are bound by the terms of the confirmed plan. A confirmed plan creates new contractual rights, replacing or superseding any and all prepetition contracts with creditors. After the plan is confirmed, the debtor is required to make plan payments and is bound by the provisions of the plan of reorganization. There are, of course, exceptions to the general rule that confirmation of a plan operates as a discharge. Confirmation of a plan of reorganization discharges any type of debtor – corporation, partnership, or individual – from most types of prepetition debts. It will not, however, discharge an individual debtor from any debt made nondischargeable by section 523 of the Bankruptcy Code.
