Bankruptcy debtors with questions related to the meaning of a discharge in a bankruptcy case should consult with experienced and knowledgeable bankruptcy counsel. A chapter 13 discharge, which is distinct from a chapter 7 discharge, releases a chapter 13 debtor from the legal obligation to repay all debts provided for by the plan or disallowed, with some exception. As a result of the issuance of a chapter 13 discharge order, creditors provided for in the chapter 13 plan may no longer initiate or continue any collection actions against the debtor.

A chapter 13 discharge is broader than a chapter 7 discharge. Debts dischargeable in a chapter 13 bankruptcy case, but not in chapter 7, include debts for willful and malicious injury to property (as opposed to a person), debts incurred to pay nondischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings.

A chapter 13 debtor is entitled to a discharge upon completion of all payments under the chapter 13 plan provided that the debtor:

1. certifies that any domestic support obligations due prior to certification have been paid;
2. has not received a discharge in a prior case filed within two years for prior chapter 13 cases and four years for prior chapter 7, 11 and 12 cases; and
3. has completed an approved course in financial management.

Debts not discharged in chapter 13 include home mortgages, domestic support obligations such as alimony or child support, certain taxes, debts for most government funded or guaranteed educational loans, benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine that are part of a sentence on the debtor’s conviction of a crime.

A chapter 13 debtor will still be responsible for these debts after the conclusion of the bankruptcy case to the extent that they are unpaid pursuant to the chapter 13 plan. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for restitution or damages awarded in a civil case for willful or malicious actions by the debtor that cause personal injury or death to a person will be discharged unless a creditor timely files and prevails in an action to have such debts declared nondischargeable.

If you are behind on payments for any overdue debts, bankruptcy may a solution. Alberto Montefalcon has the legal knowledge to assist anyone who must consider filing a chapter 7 or 13 bankruptcy case. The experienced Sacramento metropolitan area/Northern California attorneys at the Montefalcon Law Offices are here to help you if your financial position necessitates the consideration of a bankruptcy case filing under Chapter 7, 11, or 13. Contact us online or schedule a consultation at any of our three conveniently located offices. Telephone our downtown Sacramento office at (916) 444-0440, our South Sacramento office at (916) 399-9944, or our Concord office at (925) 222-5929.