As many people know, there are some bankruptcy options that allow filers to discharge their debt – that is, certain debts are declared no longer the responsibility of the filer. However, not all chapters dismiss all debts. There are certain fundamental differences in Chapters 7 and 13 that result in considerable differences in the amounts and natures of the discharged debts.
Discharged Debt and Bankruptcy Chapters
There are a number of distinguishing differences between Chapters 7 and 13 of the US Bankruptcy Code. Some differences concerning when and what debt is discharged include:
- The discharge occurs in a Chapter 7 filing relatively quickly, usually after time expires for a complaint or a motion to dismiss to be filed (usually 60 days).
- The discharge in a Chapter 13 filing usually takes considerably longer. Because a plan is drafted to pay back the debt over a period of several years, the debt is most frequently discharged once the plan has been completed and the debt paid off.
It is important to realize that only Chapter 7 immediately discharges the bulk of debt. Chapter 13 allows the filer to pay back of the bulk of the debt, with only part of the overall debt being discharged.
If you or someone you love is considering filing for bankruptcy for debt relief, the Milwaukee bankruptcy attorneys of the DeLadurantey Law Office, LLC may be able to help. To learn more about what we may be able to do for you, contact us today by calling 414-377-0518.