Discharging of Debts in Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a great option for people who do not qualify for Chapter 7 bankruptcy, who want to do everything possible to repay their loans as well as possible or who feel they have enough money to repay many of their loans in order to keep their assets.
At Walton Legal Services, our Indiana bankruptcy attorneys have helped many people with Chapter 13 bankruptcy. We talk with you about how Chapter 13 Bankruptcy discharge compares to Chapter 7 bankruptcy discharge so that you can make the right decisions and get on the road to financial freedom.
Walton Legal Services: More than 30 years | More than 30,000 bankruptcies filed
The Chapter 13 Payment Period
One of the main differences between Chapter 7 discharge and Chapter 13 discharge involves repayment of unsecured debt. Chapter 7 bankruptcy does not involve repayment over time, so the discharge happens very quickly. In Chapter 13 bankruptcy, the emphasis is on repayment/debt reorganization. Because of this, when you file for Chapter 13, you will make payments pursuant to a plan we prepare with your input, and, if there are any objections to the repayment plan, attend a confirmation hearing.
After this plan and confirmation hearing, there is either a three-year of five-year repayment period. During this time, you will pay your creditors in regular intervals according to the payment plan. When you have finished this repayment period without defaulting on your repayment obligations, at the end of the repayment period, the vast majority of your remaining unsecured debts will be discharged.
If you are looking for an Indianapolis debt-relief lawyer to help you find the road to financial freedom, call one of our Indianapolis law offices, call our Columbus, Indiana, office or contact us online. We offer free initial consultations, and we give you detailed up-front information about our fee arrangements, so there will be no surprises.
There are some debts that you cannot discharge in Chapter 13 bankruptcy, including:
- Child support and spousal support
- Some tax debts
- Most educational loans
- Criminal fines
- Judgments for wrongful death or personal injury cases involving drunk driving
Other than these and a few more exceptions, after the repayment period, your unsecured debts will be discharged, and you will be on the road to financial freedom.
Even if a lot of your debts come from a source that cannot be discharged, do not despair. Often by removing or reorganizing other debts, we have enabled our clients to catch up and get control over the payments for the nondischargeable debts.
