Chapter 13 Discharge | Chapter 13 Bankruptcy Lawyer Brooklyn NY

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What is a bankruptcy discharge?

What does it mean to you?

If you receive a bankruptcy discharge, you should be glad because it would mean that you are no longer liable for paying certain debts. The creditors whom you owed can longer make any kind of collection from you or file a lawsuit against you. The debts are wiped out so you can start afresh.

How about in Chapter 13? How can you get a Chapter 13 discharge?

When you file your personal bankruptcy Chapter 13, you are then required to develop a repayment plan. Once approved by the court, you need to follow the terms in the plan. Once you complete your repayment plan, the court will issue a Chapter 13 bankruptcy discharge which would take you three to five years.

Can you reaffirm a debt in Chapter 13?

You can’t have reaffirmation agreement chapter 13 because you get to keep your assets unlike in Chapter 7 which you cannot. On the other hand, you must make a reasonable repayment plan.

What types of debts are discharged after you finish your repayment plan?

Unsecured debts are discharged in Chapter 13, let’s talk about the most common ones:

1. Personal Loans

You usually take out personal loans with collateral. Yes, a personal loan can be discharged in Chapter 13, however the creditor can still repossess the certain collateral you pledged.

2. Credit Card Debts

You can get rid of the remaining amount in your credit card loan. It is an unsecured type of debt which you should primarily include in your repayment plan.

3. Medical Bills

If you are having a hard time paying off all your medical bill, you can include it in your Chapter 13 bankruptcy. You can wipe out the amount left not covered by your insurance medical care.

4. Old Unpaid Taxes

Not all tax obligations are non-dischargeable. Old taxes can be discharged under Chapter 13 because it is considered as a non priority debt only if you diligently filed returns and no fraud records.

Other kinds of debts you can get rid of are marital debts as per divorce agreement excluding spousal support and alimony, court fees, and retirement loans.

When to declare Chapter 13 hardship discharge?

A lot can happen within three to five years. Within this time you may encounter hurdles preventing you from completing your repayment plan on the agreed time frame. What can you do?

As a debtor, you may request the court to grant you a “hardship discharge.” To qualify for this:

You should show that you fail to complete the payment unintentionally and reasonably not at fault.
You should make sure that your creditors received at least about the same amount as they would have in Chapter
If it is not possible to modify the plan.

A hardship discharge is not applicable to debts that cannot be discharged in Chapter 7 bankruptcy.

You can discharge debts in many ways depending on what chapter in the Bankruptcy Code your financial disposition fits. To help you with decision-making and redirecting your case, get a bankruptcy attorney.

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