Don’t dismiss the importance of a Chapter 13 discharge

Like other Florida residents, you might dismiss the value of filing for bankruptcy because you own property that would more than likely end up sold at auction to pay your creditors in a Chapter 7. However, another chapter of bankruptcy, Chapter 13, could allow you to keep your property and deal with your financial situation. At the end of the process, you could receive a discharge of many of your debts.

The debts that keep you from enjoying your life and keep your creditors calling for payment could be dealt with in a way that leaves your assets intact. In addition, those debts that remain may be eligible for discharge, and you may receive the fresh financial start you desire.

Some debts can’t be discharged in a Chapter 13

A Chapter 13 discharge includes many unsecured debts, but certain debts (even some without security) remain after the process ends.

• Alimony
• Child Support
• Certain restitution, fines and penalties from criminal proceedings
• Certain taxes
• Debts arising out of malicious or willful activities
• Debts due to alcohol-related personal injury or wrongful death claims
• Fraudulent debts
• Recent luxury purchases
• Most student loans

You also remain liable for any debts that you fail to list in your bankruptcy paperwork and repayment plan.

How long does it take to receive a discharge in a Chapter 13?

A Chapter 13 requires you to make payments to your creditors in accordance with a court-approved and overseen repayment plan. Repayment plans last anywhere from three to five years depending on your circumstances. You won’t receive a discharge until the repayment period ends, which occurs after you make all the agreed-upon payments. Before your case can end and you receive your discharge, you must meet other requirements outlined in the U.S. Bankruptcy Code, such as completing a financial management course.

What happens when I receive a discharge?

Once you receive a discharge of any remaining debts that qualify, your creditors can no longer contact you for payment. Your obligation to pay those debts ends. A Chapter 13 remains on your credit report for seven years from the date you filed it, so once you receive your discharge, it may only take another two to four years for it to fall off your credit report.

Nothing short of your financial future is at stake when you decide to file for bankruptcy. In order to help ensure that everything goes according to plan, your interests might best be served by using the services of a Florida lawyer.