The Chapter 13 Process-Part 9
By Douglas Jacobs, California Bankruptcy Attorney on Oct 9, 2007 in Chapter 13 Bankruptcy
There are several ways a Chapter 13 can end. The plan can fail, a refinance or other economic change can cause an early pay-off, a debtor can run into such bad luck that an early “hardship” discharge is in order, or all of the payments can be made and the plan terminate according to its terms. Finally, one of the advantages of a Chapter 13 bankruptcy is that it can be terminated at any time.
The goal of any consumer bankruptcy is to receive a discharge. Simply put, that is the court order eliminating all unsecured, non priority debts. In a Chapter 13, usually the plan will call for payments of a portion of the monthly amount towards these debts. This can be a 100% pay-out, or it can be 0%, or anything in between, depending on your circumstances. But, whatever it is, at the end of the plan or upon an early termination due to a refinance or hardship, any amount not paid to these creditors is discharged.
If the plan ends because you dismiss it or because you fail in your obligations and the court dismisses it, the entire un-paid amount of your debts is still owed. Thus, you only want to dismiss a plan or allow it to get dismissed if you can pay these creditors. A good bankruptcy attorney can guide you through this process and help you avoid an untimely dismissal.
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