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How does the discharge process work in Chapter 13 bankruptcy?

Your telephone rings. It's your credit card company trying to collect an overdue bill. Yesterday, it was the hospital. Tomorrow, it might be your mortgage company. What can a Massachusetts consumer like you do? If you want to take the financial bull by the horns, Chapter 13 bankruptcy may be one of your best options.

Chapter 13 is a means to restructure debt, not debt forgiveness. It gives consumers with regular income more time - usually three to five years - to pay off their debt. In 2013, more than 340,000 debtors nationwide filed for Chapter 13 protection.

The Chapter 13 process starts when a debtor files with the U.S. Bankruptcy Court a petition and other documents describing the filer's debt, income, property, living expenses and other financial data. The filer must also submit tax returns, records of student savings accounts, a certificate of credit counseling and a debt repayment plan. With a Chapter 13 filing, the debtor is required to start making payments to a trustee within 30 days of filing the petition.

When the debtor has completed a Chapter 13 payment plan, he or she must file a Motion for Entry of Discharge and supporting affidavit with the court. The filer must also serve that motion on the trustee, all creditors and the beneficiaries of any domestic support obligations, who have 14 days to object to the motion.

If the court approves the motion, it will "discharge" the filer's debts. Discharge means a debt is legally satisfied and creditors may take no further legal or other collection actions against the debtor (like harassing phone calls). Although a Chapter 13 filing might not be for everyone, it brings debt relief and peace of mind to thousands of consumers every year.

Source: United States Bankruptcy Court - District of Massachusetts, "Chapter 13 Rules - Rule 13-22 Discharge," accessed on Feb. 20, 2015

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