In a Chapter 11 Bankruptcy, confirmation of a reorganization plan discharges a debtor from any debt that arose before the date of confirmation. It is available to both businesses and individuals. However, there are exceptions to this general rule. It does not, discharge an individual debtor from any debt made non dischargeable by section 523 of the Bankruptcy Code. Also, except in limited circumstances, a discharge is not available to an individual debtor unless and until all payments have been made under the plan. Confirmation does not discharge the debtor if the plan is a liquidation plan, as opposed to one of reorganization, unless the debtor is an individual. When the debtor is an individual, confirmation of a liquidation plan will result in a discharge after plan payments are made unless grounds exist for denying the debtor a discharge.
Once the plan is confirmed, the debtor is required to make plan payments and is bound by the provisions of the plan of reorganization. The confirmed plan creates new contractual rights, replacing or superseding pre-bankruptcy contracts. The order for confirmation can be revoked if it was obtained by fraud. The party in interest must request revocation within 180 days of the confirmation order, and the order will be revoked only after notice and a hearing to determine if the revocation should be granted.
The discharge operates as a permanent order to the debtor’s creditors that prevents them from taking further legal action and communication with the debtor, including telephone calls, letters, and personal contacts.