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In Chapter 13 bankruptcy as in Chapter 7 bankruptcy, a debt discharge is a desirable outcome for most debtors. Discuss your particular financial circumstances with an experienced bankruptcy attorney at Prescott & Pearson, P.A. Find out which of your debts can be included in a Chapter 13 bankruptcy and which can be discharged.
Chapter 13 Bankruptcy Involves Debt Reorganization and a Repayment Plan
Fundamentally, a Chapter 13 bankruptcy involves debt reorganization and repayment as its main feature. Past-due mortgage payments, credit card debts, medical bills and other unpaid debts are consolidated and a debtor repays a portion or all of the debt in affordable monthly payments over a three-to-five-year period. At the end of the repayment period, any debt that still remains is discharged.
What Types of Debts Are Dischargeable?
It is important to distinguish which debts are and are not dischargeable while preparing a bankruptcy petition. One major benefit of a Chapter 13 bankruptcy as opposed to a Chapter 7 bankruptcy is that the scope of the types of debts that can be discharged is broader. (Some types of debts such as child support and most student loans cannot be discharged in any type of bankruptcy.)
The Meaning of the Discharge at the End of a Chapter 13 Bankruptcy
The debt discharge in a Chapter 13 bankruptcy releases a debtor from any further obligations involving those debts. Creditors that have been prohibited from seeking to collect on unpaid debts through provisions of the automatic stay are now permanently barred from doing so at the end of the Chapter 13 case. They may not contact a debtor, file a lawsuit, garnish wages or seize property. If they do, they will be held liable for penalties including attorney's fees on behalf of the debtor.
Contact a St. Paul-Minneapolis Chapter 13 Bankruptcy Attorney
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To learn more about the Chapter 13 discharge, call or contact our bankruptcy lawyers today. We offer free initial consultations, quality services at competitive rates and effective representation statewide.