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How Long Can It Take To Discharge Debt Through Chapter 13?
Henry Jennings
When you file for Chapter 13 bankruptcy, you will then be expected to make regular monthly payments and meet your financial obligations as required by the bankruptcy court. However, you might wonder how the Chapter 13 repayment process will work. This is a great thing to bring up with your bankruptcy attorney.
Why Chapter 13 Can Take a Long Time
The process of repaying your debts through Chapter 13 bankruptcy can take up to five years. At some point, you will make your final payments and the rest of your debts will be discharged. Also, you might finish paying off your debts, but there will be extra steps you must take before your bankruptcy is discharged by the court.
Additional Delays
Because the courts will often be backlogged, it may take a while for them to discharge your bankruptcy. One thing that the courts will want to know is if you have taken a financial management course, which is required to discharge your debts.
If you have filed for Chapter 13 bankruptcy not that long ago, you might need to wait even longer to discharge your debts under Chapter 13 for a second time and Chapter 7 postpones the discharging of your debt even longer. However, you will experience several benefits before, during, and after your bankruptcy.
The Benefits of Chapter 13
When you file for Chapter 13 bankruptcy, you will benefit from an automatic stay on all collection activities. This means that debtors will no longer be able to harass with phone calls and letters.
If you are about to lose your home, Chapter 13 can prevent this from happening. Normally, you will need to pay back what you owe to cure the default on your mortgage so you can continue to make the normal monthly mortgage payments. However, if you file for Chapter 13 bankruptcy, you will be given more control over the terms under which you pay back your mortgage. You will be allowed to pay your mortgage back in smaller manageable chunks. Your unsecured mortgage liens might also be stripped from your mortgage.
If you have any unpaid taxes, Chapter 13 can help you with them. For example, you may be forced to pay the original taxes that you owed, but your penalties will be treated as unsecured debt. Therefore, if you are not able to pay the penalties after five years, they will be discharged. However, the only way to really know the full benefits you will receive from Chapter 13 bankruptcy is by speaking to a lawyer.
For more information, contact a bankruptcy attorney near you.
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