What Happens After a Chapter 13 Bankruptcy Gets Paid Off?

Completing your Chapter 13 plan is a wonderful feeling. You’re finally at the end of a long and involved process that has intertwined with your financial life for three or more years.

But what happens next? What should you expect?

The Final Payment

After you make the final payment, the trustee audits your case. Assuming everything looks good, the trustee then mails you a Certification of Eligibility for Chapter 13 Discharge. Sign it and return it to the court. 

If you have a mortgage payment that you intend to continue making after the bankruptcy, the trustee will file a motion with the court asking them to certify that you are current on your mortgage payment. This will put you in good standing with your mortgage company when you take over payments again. Remember that if you intend to stay in the house, you’ll have to keep paying your regular mortgage payments after bankruptcy is done. 

Don’t stop payments until the trustee files the certificate of final payment. Once you do, start making payments directly to other creditors as well, such as child support or student loan payments. 

This is also a good time to complete your second credit counseling course. You’ll need to sign the certificate you receive and mail that to the bankruptcy court as well. 

The Final Hearing

After you complete your plan, the bankruptcy court will schedule a final hearing, known as your discharge hearing. 

During this hearing, the bankruptcy judge reviews your case, verifies that you satisfied all of your payments under your plan, and makes sure none of your creditors object to the discharge.

Creditors rarely object; by this point, it usually doesn’t make much sense for them to do so. 

Final Paperwork

You’ll receive your discharge paperwork two to three weeks after this hearing. You’ll want to file this away and make extra copies.

If any creditors attempt to collect debts that the bankruptcy court has forgiven, you can send them this paperwork to prove that they should stop attempting to collect the debt. If they continue, they are in violation of federal law, and you may sue them. 

Once you receive this paperwork, your bankruptcy case is over. You can apply for credit and make major purchases without asking anyone for permission. You no longer have to make any payments, and you may spend your money as you see fit. 

Considering Bankruptcy?

Bankruptcy may be one of the best financial decisions you ever make.

If you’re considering bankruptcy, don’t try to go it alone. Most Chapter 13 bankruptcies are not successful without help from an attorney.

Contact us to schedule a consult today. 

See also:

What Newark, NJ Residents Need to Know About the Bankruptcy Means Test 

How to Stop Foreclosure in New Jersey 

Can You Afford to Pay Your Newark, NJ, Living Expenses During a Chapter 13 Case?