Life is usually pretty challenging for people before they file for Chapter 13 bankruptcy. They may be overwhelmed by debt and not know where to get help. Bankruptcy often offers them a “do-over” or re-set. But what about life after Chapter 13 bankruptcy? Once you get your Chapter 13 discharge, what happens next?
Getting to the Chapter 13 Discharge
Consumers looking for bankruptcy relief generally file either a Chapter 7 (liquidation) or a Chapter 13 (repayment plan). Bankruptcy law sets out guidelines for determining whether a debtor should file Chapter 7 or Chapter 13. Generally, Chapter 13 debts have a regular income that could enable them to repay at least part of their debts. We will just be looking at Chapter 13 bankruptcies in this article.
Debtors file the paperwork to start their bankruptcies, then work with a bankruptcy trustee to develop a repayment plan. Such plans require the debtor to pay monthly installments for three to five years. Most creditors are prohibited from taking collection efforts during the plan period.
The Discharge Itself
The Chapter 13 discharge happens after the discharge has completed the repayment plan. However, bankruptcy law is complicated. Debtors are still required to:
- Certify that domestic support obligations are paid up;
- State that he or she has not been discharged in a prior bankruptcy within the last two years;
- Complete a financial management course that has been approved by the bankruptcy administrator.
Some people may qualify for a hardship discharge if they are unable to complete their repayment plan. This situation can be challenging, so contact a bankruptcy attorney for advice. Otherwise, the debtor is released from most debts after the discharge.
Rebuilding Your Life After a Chapter 13
In some cases, debts still have to be repaid, including:
- student loans,
- child support,
- judgments for some personal injury claims, and
- penalties for criminal acts.
Make sure you have accounted for the repayment of these debts after your Chapter 13 discharge.
It’s also important to do the following as you get your life back on track:
- Watch your credit report for any unauthorized activity and mistakes.
- Also, watch for your bankruptcy to drop off your credit report about two to four years after you receive your discharge.
- Start slowly rebuilding your credit.
- Remember what you have learned in financial management and credit counseling courses.
- Budget carefully.
- Change your spending habits to meet your current financial situation.
- If possible, start an emergency fund to cover future problems.
It is possible to start over. However, make sure you have the legal advice you need to get the best possible outcome from your bankruptcy case.
To Have Life After a Chapter 13 Discharge, You First Have to File Your Chapter 13
Attorney Leslie Craft has the experience you need to deal with bankruptcy and traffic violations. Ms. Craft’s goal is always to help her clients get past their legal problems and get on with their lives.
To schedule a free personal consultation, call Craft Law Offices at (252) 752-0297 or email us at firstname.lastname@example.org. My offices are located in Greenville, Morehead City, and Rocky Mount for your convenience. I also represent clients in surrounding Eastern North Carolina communities, including Warrenton, Elizabeth City, Roanoke Rapids, Goldsboro, and Jacksonville.
Bankruptcy Doesn’t Have to Be a Painful Process.