Chapter 13 Super Discharge: Eligibility and Benefits
If you are not a bankruptcy attorney, you may not be aware that Chapter 13 offers unique features such as the “super discharge,” which can provide additional relief to debtors beyond what is available in a typical Chapter 7 filing. The term “super discharge” is a term of art and not a legal term. One of these features is the “super discharge,” which can provide additional relief to debtors beyond what a regular Chapter 7 discharge offers. This blog post will explore the differences between Chapter 13 bankruptcy and other types of filings, as well as outlining the requirements for filing under this chapter and examining when a hardship discharge may be available. We’ll discuss the requirements for filing under Chapter 13, including creating a repayment plan that lasts between three to five years. We’ll examine what makes up a hardship discharge and when it might be available to debtors in certain situations. By the end of this article, you will equip yourself with a basic understanding of Chapter 13 and whether it is suitable for your fiscal circumstances.
What is a Chapter 13 Super Discharge?
A Chapter 13 Super Discharge is a term used by bankruptcy practitioners to refer to the extra benefits only available in chapter 13. Those who have filed for Chapter 13 bankruptcy and need a debt-relief solution may be eligible for a Super Discharge. A Chapter 13 Super Discharge offers a potential path to financial liberty by providing an exit from overwhelming debt.
The process begins when the debtor files for Chapter 13 bankruptcy protection and submits a repayment plan, outlining how they will pay off their creditors. Once the court has accepted the repayment plan, it is legally binding on all parties–debtor, creditors and trustee assigned by the court. There are special requirements for chapter 13, such as paying off certain taxes and staying current with domestic support obligations that are necessary to get a “super discharge”.
The major benefit of obtaining a super discharge is that it eliminates certain debts that are not otherwise dischargeable in chapter 7, such as E-ZPass and MTA tolls. This type of discharge offers more robust protection against creditor harassment than other discharges do, making it difficult for creditors to collect any money after the case has been closed–even if they had secured loans prior to filing (such as mortgages). This means those facing foreclosure may find solace in this process since they won’t have to grapple with making payments on their mortgage arrears while still dealing with other unsecured debts, like credit cards or medical bills being discharged through chapter 13 super discharge proceedings.
We can examine what debts are dischargeable in Chapter 13.
Key Takeaway: Chapter 13 Super Discharge is a special provision in the Bankruptcy Code that allows certain debts to be wiped out with no additional payments from the debtor. It offers more robust protection against creditor harassment than other discharges do, allowing debtors to ‘breathe easier’ knowing their financial future is secure.
What Debts are Eligible for a Chapter 13 Super Discharge?
Debts eligible for this type of discharge include those for tolls and fines owed to the government, willful or malicious injury to be discharged in a prior bankruptcy, and debts incurred to pay a non-dischargeable tax debt. Some condominium, cooperative and homeowners’ association fees may also qualify for the super discharge.
Property settlement debt from divorce proceedings is another example of an eligible debt. This can include any amounts owed to a property settlement that were part of a divorce decree. Chapter 13 does not automatically discharge divorce property settlement debt. They must file a motion with the Court to get rid of property settlements in chapter 13. The debtor must have completed all payments required by their court-approved plan before they can receive the super discharge on these types of obligations.
In order to get a Chapter 13 Super Discharge, it’s important that all creditors listed in the debtor’s petition have received notice of their rights under this provision and objected if they so choose. If there are no objections raised by any creditor after receiving adequate notice, then the court will grant approval for a full discharge on those particular debts as long as they met all other requirements.
Debts such as taxes, student loans and domestic support obligations are not eligible for a Chapter 13 Super Discharge. Though certain debts, such as taxes, student loans and domestic support obligations, are usually not eligible for a Chapter 13 Super Discharge, with proper guidance from an experienced bankruptcy lawyer, it is possible to get them discharged through other methods. Moving on to the next topic: How Does a Chapter 13 Super Discharge Work?
Key Takeaway: A Chapter 13 Super Discharge allows debtors to wipe the slate clean on certain debts, such as those for MTA and E-ZPass tolls, willful injury or divorce proceedings.
How Does a Chapter 13 Super Discharge Work?
In order to receive a Chapter 13 Super Discharge, the individual must complete a chapter 13 plan approved by the court. The typical payment plan is from 3 to 5 years and may include tax refunds.
If they meet the requirements, they will discharge most debts without requiring further payment from the debtor. This means that if a debtor has been making regular payments on their debts for several years but still owes money on some accounts, they may get rid of those remaining balances through a Chapter 13 Super Discharge.
Under this program, most consumer debts, such as credit card bills, medical bills, personal loans, utility bills and other similar obligations, are eligible for discharge.
Besides eliminating existing balances due on qualifying accounts, the Chapter 13 Discharge also prevents creditors from taking any action against the debtor regarding collecting on those outstanding amounts. This protection applies even if there was previously an active judgment or lien against them prior to filing for bankruptcy protection.
A Chapter 13 Super Discharge is a powerful tool for debtors to eliminate certain debts that would otherwise remain in the bankruptcy estate. Gaining knowledge of this practice can help you decide if it is the ideal choice for your finances and then benefit from taking such a step.
Key Takeaway: A Chapter 13 Super Discharge is a great way for debtors to get out of the red and enjoy financial freedom. This special bankruptcy discharge allows consumers to have their eligible debts discharged without further payment being required, as well as preventing creditors from taking any action against them regarding collecting on those balances afterwards. In short, it’s an effective method of wiping the slate clean.
What are the Benefits of a Chapter 13 Super Discharge?
For those having difficulty making ends meet, a Chapter 13 Super Discharge may be of great help.
This type of discharge allows debtors to deal with certain debts not dischargeable in chapter 7, such as back taxes and alimony payments, providing debtors with more time to pay off their remaining obligations without fear of legal action or asset seizure.
Another key benefit is that filing for a Chapter 13 bankruptcy allows the debtor to keep all assets they had prior to filing for bankruptcy protection. Debtors can keep cars, homes, stocks and any other assets they had prior to filing for a Chapter 13 bankruptcy.
Besides these benefits, debtors who file for a super discharge may also qualify for an automatic stay on collection activities from creditors while their case is pending in court. Creditors must put a hold on any attempts to collect funds while the court weighs in on the case, instead of pursuing debtors during this period.
Key Takeaway: A Chapter 13 Super Discharge is a powerful tool that can help debtors who are in financial difficulty to eliminate certain non-dischargeable debts and keep their assets, as well as receive an automatic stay on collection activities. It also allows for the full discharge of unsecured debts after completion of a repayment plan within three or five years, free from wage garnishments, lawsuits, and other collection activities.
Conclusion
It allows for the discharge of debts that are not eligible in other bankruptcy chapters, including willful and malicious injury by the debtor, civil fines and penalties, debts incurred to pay non-dischargeable tax debt, and marital debts created during divorce proceedings. With careful planning and consideration of all options available through chapter 13 super discharge laws, you may get financial freedom from overwhelming debt.