When you filed your Chapter 13 bankruptcy five years ago, the goal was to complete the plan and get a discharge. The “discharge” is the legal determination that all of your unsecured debts that remain after the plan are gone. The collection company or bill collector can no longer bother you or seek payment for those debts.
So, what needs to be done in order to actually get the court to issue the discharge paper?
Like so many of the bankruptcy processes, this can vary from district to district, even in the same state!
Additionally, it may make a difference to the process depending on what else occurred during the bankruptcy. For example, if you own a home and were using the Chapter 13 to “strip” the second deed of trust or mortgage, then you want to make sure that everything is done to eliminate that debt and the lien on your property.
In most districts, you will need a specific filing to accomplish this. In the Eastern District of California, where I practice, to eliminate the lien requires either the agreement of the lender on the Second deed of trust or an adversary complaint.
Under current law, you can also get a statement, signed by the court, that your mortgage is up to date. This is a great thing to have if you started the Chapter 13 when you were behind in the house payments. Without that determination, the lender will often come back after the Chapter 13 plan is over and claim that you have other charges that haven’t been paid like “attorney’s fees incurred to review the bankruptcy” or “property valuation charges.” It’s certainly better to have the court resolve those issues before closing the case rather than fight them out later.
There is a lot to consider before the case is closed. A good bankruptcy attorney will have counseled you about these issues and be there to help you. Make sure he or she is paying attention, and don’t just assume it all happens automatically.
A discharge and the closing of your bankruptcy is a great thing. Make sure it is done right.
image credit: Lee Law Firm
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Last modified: May 22, 2013