You file for Chapter 13 bankruptcy, go to court, get approved and then move forward with the repayment plan. Once that court case is over, has your debt actually been discharged?
It has not. Just because the court granted you the Chapter 13 filing doesn’t mean the debt is gone. You have to stick with the repayment plan, make those payments on time and take care of the debt over the next three to five years. Some debt could be discharged right away, but everything that goes into the repayment plan is still your debt until the plan concludes.
Even after you finish making payments, the debt won’t formally be discharged until the court goes over the records and assesses your case. They will then approve the discharge and it will actually happen a short time later.
This is notably different than Chapter 7 bankruptcy, though even that doesn’t get you an immediate discharge. You still need to wait for about four months after you start the process before it will be approved and officially taken out of your name. Plus, this four months is just a rough average; each case is different, and you could wind up waiting even longer, especially if your case is complicated.
Remember that bankruptcy isn’t immediate. It takes time and there are many legal steps that must be followed to the letter before your debt is eliminated. When learning about all of your options in the face of this debt, make sure you understand the timeframe, how the entire process is going to play out and what obligations you have.
Source: Fox Business, “When is a Bankruptcy Officially Discharged?,” Erica Sandberg, accessed March 24, 2017
