What Happens When You Finish Paying Off a Chapter 13 Bankruptcy?

Many Americans are struggling financially due to the coronavirus pandemic. An estimated 205 million people are at risk of their utilities being disconnected, and many more are in jeopardy of their vehicles being repossessed and their homes being foreclosed. A significant number of Americans have been laid off or experienced a reduction in their work hours, causing them not to be able to pay their bills on time. Recovering from the coronavirus shutdowns will take time, but Americans who are struggling do have options. One of those options is to file for bankruptcy. Filing for Chapter 13 bankruptcy is a viable option for helping you get back on your feet financially. What happens after you finish paying off a Chapter 13 bankruptcy?

The Chapter 13 Bankruptcy Process

When you file for a Chapter 13 Bankruptcy, the bankruptcy court will allow you to keep your assets in exchange for a promise to repay part of your debts. Unlike with a Chapter 7 bankruptcy, in which the debtor requests a complete discharge of his or her dad’s, in a chapter 13 bankruptcy, you will make an effort to repay your debts over time. While your chapter 13 bankruptcy is still in process, you will be required to submit monthly payments to the trustee assigned to your bankruptcy case. 

You will not be able to take on any more debt without the permission of the trustee. The fact that people in the process of a Chapter 13 bankruptcy cannot take on any more debt helps them tremendously. Once your payments are finished, you will start fresh without taking on any new deaths during the process. As you are nearing the end of the chapter 13 process, your trustee will complete an entire review of all of your payments and your chapter 13 case. 

Completing the Order Confirming Your Chapter 13 Case

Once you have paid off all of your chapter 13 bankruptcy debts, you will go to the bankruptcy court for one last hearing — your discharge hearing. You have the option of directing your attorney to attend the hearing in your place. The bankruptcy judge will review all of your case details. He or she will verify that you have satisfied all of the payment requirements outlined in the original bankruptcy judgment. As long as none of your creditors object, the judge will then move to discharge your chapter 13 bankruptcy case. 

You should expect to receive the final paperwork for your bankruptcy within two to three weeks of your hearing. Make sure you keep all of the paperwork that arrives in your files. You may need to send a copy of the paperwork to any of your creditors who are still trying to collect debts that the bankruptcy court has forgiven. Once your bankruptcy has been discharged, creditors can no longer continue to pursue you for unpaid debts. If they do pursue you, you can report them for violating federal law.

Your trustee will review your bankruptcy case to ensure that you have satisfied all of their requirements that were listed in your “Order Confirming the Chapter 13 Case.” If you are curious as to where to locate this order, you can contact the court or your attorney. They will be able to point you in the right direction and provide you with any materials you may need to finish out this last portion of your bankruptcy. After you filed the report with your bankruptcy trustee, the court presiding over your case will mail you a legal form titled “Certification of Eligibility for Chapter 13 Discharge.” You will need to sign this document and mail it back to the court. Be sure that you sign all of the signature areas and that you enter accurate and complete information.

Next, you will need to make sure that you finish your second counseling course. You will need to sign the certification and hand-deliver it or mail it to the closest US bankruptcy court. After the clerk of the court receives your form, he or she will file the certificate. You should expect to receive your discharge of debts within 30 days. When you receive your discharge, you will know that your bankruptcy is officially over. The discharge is the conclusion of a Chapter 13 bankruptcy case. If you still have not completed your second financial counseling course, you will need to do so as soon as possible. You can either contact the same company you use for your first course or find another course that works for you.

Regaining Control of Your Finances

One of the most empowering parts of the bankruptcy process happens when debtors regain control of their own finances. During the bankruptcy process, you do not maintain complete control of your finances. For example, your trustee likely seizes your state and federal tax refund so you could use them to pay your debts. Once the court has legally discharged your chapter 13 bankruptcy, you will begin to receive your tax refunds yourself, and you can apply for new credit cards or other loans without getting permission from the bankruptcy court first. You must continue to pay any other outstanding debts that were not discharged during the bankruptcy process, including alimony, tax debts, student loans, child support, and court fines.

Contact a Chapter 13 Bankruptcy Lawyer Today

If you are considering a Chapter 13 bankruptcy in Philadelphia and looking forward to the day when your debts will be discharged, we can help. At the Law Offices of Cibik & Cataldo, we understand how difficult it is for our clients who cannot pay their bills due to the coronavirus pandemic. We work hard to represent our clients in Chapter 13, Chapter 7, and Chapter 11 bankruptcies so they can start fresh and embrace their financial future. If you would like to learn more about filing for bankruptcy, contact us today to schedule your initial consultation.