Difference Between Terminated & Discharged

by Stephanie Faris - Updated July 09, 2018
Businessman carrying his belongings with colleagues in background

Ending a contractual agreement can be tricky, especially if the other party doesn’t want to let you out. But although there may not be a difference between fired and terminated, there is a difference between terminating and discharging other types of contracts. If you file bankruptcy, you’ll also see the two terms used, which makes sense considering a bankruptcy releases someone from an obligation ­– in this case, his debts.

What Is a Bankruptcy Discharge?

When times get tough, some may find they can no longer pay their debts. If that happens, one option is to file bankruptcy, which can either relieve you of all of your debts completely or set up a plan to help you repay them. Once your bankruptcy is granted, the court will need to rule to discharge your debts, which frees you from having to pay them. Once a discharge has been granted, the creditor can no longer take action to collect the debt.

A bankruptcy termination is a completely different matter. When a bankruptcy filing is terminated, it is effectively dismissed, which means the bankruptcy process ends. The termination can be ordered by the judge due to debtor misconduct or can be requested by the debtor herself if she changes her mind about filing.

Difference Between Fired and Terminated

Just as a discharge means you’re freed from your debts, a person who is fired is discharged from a job. Unlike bankruptcy, though, there’s no difference between being discharged and terminated. It’s the same as the difference between fired and terminated – in that there is no difference. The three words can be used interchangeably, depending on how intimidating you want to sound.

However, some businesses do use the term “terminated without prejudice,” which means the employee is eligible for rehire at a later date. This type of termination generally occurs if an employee was terminated for reasons unrelated to work performance. The person might, for instance, have been a diligent worker but the position was a poor fit.

Video of the Day

Brought to you by Techwalla
Brought to you by Techwalla

Discharge of a Contract

It’s also important to distinguish between discharge and dismissal in terms of general contracts. If you have a contract in place, it likely has terms associated with it. If you’re a business working on a project for a client, the contract may outline the items to be completed before the contractual obligations have been reached. Once you’ve fulfilled your obligations, the contract can be discharged, which means the project was finished as agreed.

If a contract was terminated, though, it indicates something else entirely. Although a contract could technically be terminated upon completion, chances are it’s terminated due to a disagreement or a decision that it simply isn’t going to work out as planned. This can be a much less agreeable reason for the end of a contract than a polite discharge.

About the Author

Stephanie Faris is a novelist and business writer whose work has appeared on numerous small business blogs, including Zappos, GoDaddy, 99Designs, and the Intuit Small Business Blog.

Photo Credits

  • Wavebreakmedia Ltd/Wavebreak Media/Getty Images
Cite this Article A tool to create a citation to reference this article Cite this Article