Debts Discharged at the End of Chapter 13 Bankruptcy

Bankruptcy Attorney in Portland, OR

If you are currently dealing with financial problems, never think you are alone. Many people, even the wealthiest people in the world, have undergone financial hardship once in their lives. If you or someone you know falls behind on secured or unsecured debts, filing for bankruptcy with the help of an experienced bankruptcy lawyer may be your best solution. Intrinsically, the bankruptcy process is very complicated. At Michael D. O’Brien & Associates, P.C., our legal team is strongly committed to providing not just guidance but also education on the best available options you have. With our extensive years of experience, we will help you secure your future and achieve your financial goals. If you are considering bankruptcy to get out of debt, set up a free legal case evaluation with us now! 

Why Do I Need a Bankruptcy Attorney in Portland, OR?

Choosing the right lawyer is crucial if you are about to file for bankruptcy to manage your ongoing debts. You should acknowledge what qualities your bankruptcy lawyer should have. Keep the following characteristics in mind:

• Excellent Attorneys – Other than experience, you should consider other factors to ensure that your attorney is excellent. Years of experience are inadequate; your lawyer should have demonstrated competence in more than one area.
• Offers Affordable Legal Services – Hire a bankruptcy attorney who understands your current situation. Choose someone willing to negotiate their service costs if you are in debt. You deserve an empathetic bankruptcy attorney.
• Offers Quick Solutions – Your financial issues must be resolved as soon as possible. Choose a bankruptcy firm that will devote time and expertise to your current situation and provide the best legal solutions.

In Oregon, there are only three nationally-certified consumer bankruptcy lawyers, and two of them are at Michael D. O’Brien & Associates, P.C. Other than our considerable experience in law practice, our competence and consistent excellence enable us to establish a solid reputation in the state of Oregon. We offer quality representation and affordable bankruptcy protection. Our legal team is dedicated to giving our time and attention to your case to propose quick legal solutions. 

Which Debts Get Paid in Chapter 13?

When filing for Chapter 13 bankruptcy, debts are treated differently. Every debt will fall into one of many categories, which will then determine whether the debt must be paid or discharged. Foremost, it is crucial to establish whether the debt is secured or unsecured. Unsecured debt will be divided into nonpriority and priority unsecured debt. Priority unsecured debts are debts that have to be paid before the nonpriority debts, and not all are dischargeable. Nonpriority unsecured debts can only be paid if there is leftover money. In many cases, the debt is dischargeable by filing bankruptcy. Below are the salient details: 

• Secured Debts – You must either pay or surrender the collateral if it can secure your obligations. It is typically a car or a house. Other long-term debts, such as a 30-year mortgage, do not have to be completely paid through the Chapter 13 repayment plan. If you fall behind on payments, you should compensate for the difference through the plan. If you give up the collateral, the debt should become nonpriority unsecured debt.
• Priority Unsecured Debts – This debt type cannot be wiped out through bankruptcy filings. In Chapter 13 bankruptcy, a debtor must file priority claims. 
• Nonpriority Unsecured Debts – Most discharged debts belong to the category of nonpriority unsecured debts in Chapter 13 bankruptcy. Some examples are credit card debt, personal loan debt, utility bills, and medical bills. Unless you can provide substantial proof in an adversary proceeding, student loans are not dischargeable. Since student loans are considered long-term debts, Chapter 13 will not require you to pay them in full.

After completing your payment plan in Chapter 13 bankruptcy, your remaining nonpriority unsecured debts will be discharged respectfully. Only student loan debt falls under the exception.

Qualifying Debts In Chapter 13 Bankruptcy Discharge

The most common sorts of nonpriority unsecured debts are as follows:

• Medical Bills – If you just incurred medical debts because your care provider does not cover your required treatments, filing Chapter 13 can discharge them.
• Credit Card Debt – Most bankruptcy filers have an outstanding balance on a credit card that they would wish to get rid of. Because credit card debt belongs to the nonpriority unsecured debt category, it will be discharged after your payment plan is in Chapter 13.
• Personal Loans – Just like your credit card debts, uncollateralized personal loans can also be discharged in Chapter 13.
• Older Tax Debt – Tax debts are generally considered nondischargeable priority debts. However, some taxes can be considered nonpriority debts and discharged at the end of your Chapter 13 repayment plan. Keep in mind that for it to be discharged, you must not commit any fraud.
• Negligence or Fraud-related Debt – If a competent court made a judgment against you due to contract breaching or negligence that caused damage to someone’s personal property, you could discharge them through bankruptcy under Chapter 13. However, it is substantial to note that this chapter does not discharge debt for malicious or willful injury caused to another person.

Benefits of Chapter 13

Other than being able to discharge certain types of debt, Chapter 13 bankruptcy also allows you to:

• Prevent the interest rate from increasing on unsecured debts.
• Give you three to five years to repay the claims.
• Retain properties that would otherwise be possessed by your creditors.
• Stop your creditors’ collection activities against you or your co-signer.
• Give the creditor back its car and security, in complete or partial satisfaction of the claims.
• Put an end to your obligations to some creditors whose services were not yet received, such as dance studios, spas, health clubs, leases, correspondence courses, etc. 
• Any debts incurred after filing Chapter 13 bankruptcy cannot legally harass you, pursue wage garnishment, property repossession, or anything else without first obtaining a court order.
• Make proposals to sell some of your properties to complement your plan.
• If significant changes suddenly occur in your circumstances, you can legally propose amendments to the plan so that it will not be compromised. If the change is unforeseen, which makes it impossible to continue even the amended plan, you can request a hardship discharge.
• Finally, if your circumstances change but you don’t wish to have a hardship discharge, you have the right to convert your Chapter 13 bankruptcy to Chapter 7. 

When Can You Get The Chapter 13 Bankruptcy Discharge?

It is one of the requirements that before you obtain your Chapter 13 discharge, you need to pay some of your debts through your payment plan. However, your repayment plan is not dependent on the overall debt amount. It is more dependent on the type of debt you incur instead, your regular income, and your property value.  In particular, it is necessary to pay a greater amount of these unsecured debts:

• Your disposable income – the remaining amount after subtracting the allowable expenses; or 
• Non-exempt property value – properties you cannot protect under bankruptcy exemption.

The trustee in bankruptcy will pay the creditors according to the priority of the debt. Other priority debts, such as alimony, child support, and tax debt, must be settled in full, in contrast to nonpriority unsecured debts. It is possible to pay less than the actual amount you owe, but only if your debts all fall under the category of priority debt, such as support obligations and tax balances. 

Call our Bankruptcy Attorney Now!

Filing for a bankruptcy petition can give you various benefits, as mentioned above. While the act of filing does not necessitate a lawyer, it is still highly advised to hire one. Bankruptcy laws are often complicated; thus, it takes an experienced bankruptcy attorney to achieve positive results.At Michael D. O’Brien & Associates, P.C., we offer excellent legal services with quick solutions while remaining affordable. In Portland, two out of three nationally-certified consumer bankruptcy lawyers are on our team. Aside from bankruptcy, we also handle debt alternatives and estate planning concerns. If you are currently in a dilemma because of your debts, get help by requesting a free case evaluation now!