When a Florida resident files for bankruptcy, it is because he or she is waiting for one thing to happen—their debt to get discharged. That is the light at the end of the tunnel, the destination to which all roads are leading. So what exactly does discharge mean and how long does it take for debts to be discharged in a Chapter 13 bankruptcy?
What happens as a result of a discharge
A debtor is not required to pay debts that have been discharged. It’s a permanent order that prevents collectors from taking any collection action on discharged debt, including phone calls and letters. Unless there are any objections to the discharge, it is granted automatically and a copy of the letter is mailed to all creditors, warning them not to pursue any collection efforts.
In Chapter 13 bankruptcy, the debtor agrees to a repayment plan that spans between three to five years. A discharge takes place when all the payments under the plan have been made. That means that discharge generally takes place around four years after it has been filed for. However, the discharge may be denied if the filer does not complete the required course in financial management.
Unique features of a Chapter 13 discharge
The debts discharged are broader in Chapter 13 than in Chapter 7, as it included debts arising from property settlements in divorce or separation proceedings and debts for malicious injury to property. While most debts are discharged through bankruptcy, it is important to note that not all are. Those considering bankruptcy as a way to gain control over their financial life may want to consult an experienced attorney to understand where they will be at the end of their repayment plan.