Discharge from Chapter 13 Bankruptcy in Maryland and Washington DC

Information Provided by a Washington DC and Maryland Foreclosure Lawyer

Discharge in Chapter 13 bankruptcy means that all debts under the Chapter 13 repayment plan are forgiven through the bankruptcy process. Once a debt has been discharged, the debtor is no longer personally liable for repaying that debt. The laws surrounding discharge of indebtedness are complex and, accordingly, it is essential that you contact an experienced Washington DC and Maryland foreclosure lawyer to assist you through the Chapter 13 bankruptcy process.

Prerequisites for Discharge

Once the debtor makes all required payments under the Chapter 13 repayment plan, the debts are discharged if the debtor has also:

Certified that all domestic support obligations have been satisfied
Completed the required financial management course
Not received a discharge during the bankruptcy case or within four years prior to filing the Chapter 13 bankruptcy petition

The court will provide notice and a hearing to determine whether there is any pending proceeding that may limit the debtor’s homestead exemption. If the court finds that there are no such limitations, all debts under the plan are discharged.

Effect of a Chapter 13 Discharge

Once a debt has been discharged, the creditor may no longer initiate or continue any legal action against the debtor to collect repayment of the debt. Additionally, a creditor is prohibited from sending letters or making telephone calls to collect the debt. Certain debts cannot be discharged in Chapter 13 proceedings, including:

Child and spousal support obligations
Certain taxes
Student loans
Criminal restitution
Government-imposed restitution, fines, and penalties
Debts arising from death or personal injury caused while driving intoxicated

The discharge of debts in a Chapter 13 case is broader than in a Chapter 7 case, because the following debts may be discharged:

Debts for willful and malicious injury to property
Debts incurred to pay non-dischargeable tax obligations
Debts arising from divorce property settlements

The Chapter 13 Hardship Discharge

If circumstances arise after the confirmation of a plan that hinders the debtor’s ability make all payments under the plan, the debtor may request a “hardship discharge.” A hardship discharge is available if:

The debtor’s inability to complete plan payments is due to circumstances beyond the debtor’s control
Creditors have received at least as much as they would in a Chapter 7 liquidation case
Modification of the plan is not possible

The debts that may be discharged pursuant to the hardship discharge are more limited in scope than the general discharge and the hardship discharge does not include any debts that would be non-dischargeable in a Chapter 7 bankruptcy case.

Conclusion

If you are facing bankruptcy proceedings and have questions about the discharge process, it is important that you contact a qualified Washington DC and Maryland bankruptcy attorney to assist you. Kevin D. Judd is an experienced attorney who has been involved in numerous Maryland and Washington DC bankruptcy proceedings. Contact Maryland and Washington DC Chapter 13 lawyer Kevin D. Judd today for assistance with your Chapter 13 bankruptcy discharge.

Your gateway to financial freedom.