A Chapter 13 bankruptcy plan lasts a minimum of three years and a maximum of five years. If you are nearing the end of your repayment plan, you’re likely feeling a high sense of pride and relief. However, you may also be wondering about what’s next.
Upon completion of a Chapter 13 plan, all of your unsecured or non-priority debts will most likely be discharged, with a few caveats. The debt discharge following Chapter 13 bankruptcy is actually broader than the discharge you would’ve received in Chapter 7 because there are certain debts which are non-dischargeable in Chapter 7 but dischargeable in Chapter 13.
If you’ve successfully made all required payments to your creditors, met all of your domestic support obligations, have not received a debt discharge within two years, and have passed an approved financial management course, your unsecured debts will likely be wiped out.
Here is a list of some non-priority debts which will likely be wiped out following Chapter 13:
– Credit cards: Any remaining balance after completing your bankruptcy plan will be discharged.
– Medical bills: Perhaps the most common reason Americans file for bankruptcy is because of extreme medical debt. Any remaining medical bills you have can be wiped out.
– Old tax obligations: Overdue taxes are generally considered priority debts, meaning they can’t be discharged. However, there are exceptions where a person can have old income tax obligations discharged.
– Personal loans: Very similar to credit card debt, personal loans are considered non-priority. One caveat is that if you gave an asset as collateral (if they haven’t been paid in full), the creditor may seize that property; however, you would then be relieved of any obligation to pay that debt.
– Willful and malicious damage to property: Although not dischargeable under Chapter 7, any debts caused by damaging property would be wiped out under Chapter 13.
Those who are curious about whether filing for Chapter 13 bankruptcy is right for you and how your life and finances will look three-to-five years from now should contact an experienced NJ bankruptcy attorney.
Contact the Law Office of Joel R. Spivack today for a risk-free consultation to discuss your financial situation and your options. For more than 20 years, Joel R. Spivack, Esq. has helped countless people, like you, get back on the road to financial health through bankruptcy protection.