Chapter 13 is a valuable tool that lets you catch up on overdue mortgage, car payments, taxes, and domestic support obligations. It also applies where you have the ability to repay some or all of your debts over time. You must have less than $307,675 in unsecured debt (such as credit cards and doctor’s bills) and less than $922,975 in secured debt (such as mortgages and car loans) to qualify for Chapter 13. The filing fee for a Chapter 13 is $274.00.
Under Chapter 13, you keep all of your property, both exempt and non-exempt, as long as you resume making your regular payments on secured debt and keep current under the repayment plan that you propose. A repayment plan can last for up to five years. After finishing your payments, most of your unsecured debts are discharged.
Once your case is over you will receive a discharge. The discharge prevents your creditors from taking any steps to try to collect their unsecured debt. They cannot call you, write you, sue you, or take any steps that could be considered an attempt to collect its debt. If you want to keep property that has a lien on it, you must keep your payments current, and may be required to reaffirm your debt. Some debts can not be discharged. Typical examples are child support, alimony, and other domestic support obligations, some taxes, student loans, criminal restitution, and debts for death or personal injury caused by operating vehicles while intoxicated with alcohol or drugs.
Pursuing Collection of Discharged Debts is Against the Law
The law is simple: when a debt has been discharged, you don’t owe it anymore.
When a creditor, collector or debt buyer attempts to collect on a debt that’s been discharged in bankruptcy, that creditor is breaking the law. Whether a debt purchasing agency is calling you and demanding payment or the original creditor or collection agent has quietly reported an outstanding balance to the credit bureaus, that action is an illegal attempt to collect, and you have remedies available to you.
