When Your Chapter 13 Is Finished

31 Jan When Your Chapter 13 Is Finished

Completing a Chapter 13 Plan is quite an accomplishment for anyone, and it’s something to be proud of, no matter the circumstances. I recently discovered that one of my clients had not only completed her Chapter 13 Plan payments (which totaled more than $1000 per month for 60 months) but that she had never been late in making a single payment. She latest she ever made a payment was on time. Now, that takes dedication, commitment, and probably a little luck. So, what happens when you’ve finished making those payments?

First, a word about when to stop making payments. In the District of South Carolina, the language of our plan states that payments will be made for a specified number of months, “or more,” but not to exceed 60 months. So, you could have a plan that says 48 months, but you might be required to pay for 50 or 51 months, to meet your full obligation. If the additional obligation is significant, the trustee is probably going to want an amended plan, but if it’s just a payment or two, the term may simply extended. So how do you know? I tell my clients to continue to make payments until the trustee tells them to stop or to check with me. Sometimes it works the other way around–because some claims aren’t filed, the payments end early. I rarely get any complaints about that.

The practice of the trustee here is to notify the debtor and the court when the plan obligation has been met. Shortly thereafter the court will issue the Order of Discharge. That is the bankruptcy court order that permanently prohibits attempts to collect any remaining balances due on most of debt that was listed in your bankruptcy. (The exceptions are things like child support and student loans.) It is the point of the whole exercise, and you are going to want to keep a copy of the order of discharge for your records.

Once the trustee has completed distributing the funds on hand to your creditors, she will file a report with the court detailing those payments, and that report will be audited by the Office of the United States Trustee. Once audited, the report will be filed with the Court, and you will receive a copy of that, too. That will provide you with a record of what was paid from your Chapter 13. This process is usually done without any action or input on the part of the debtor, and when it is completed, the court will close your case.

If you think you are near the end of your case, and have questions about how things work in your district, talk to your attorney. And give yourself a pat on the back. You deserve it.

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