Hi Guys, I am having some difficulty understanding my attorneys explanation and thought I'd pose my question here so as to avoid more legal fees. I obtained a chapter 7 discharge in 2011. I since filed Chapter 13 mainly due to stripping my second, some tax liens and two small credit cards. In am in year two of my chapter 13 and my attorney said I will not receive a "discharge" since I already received a discharge to my 7. However, the judge signed a document that when we finish the plan, we won't owe on second lien, but we are only paying 24% go creditors. I am so confused about what happens when plan is over if we don't get a discharge. Also, can my 2nd mortgage holder come after me or is that laid to rest? What happens to the few creditors that aren't paid at end of plan? Can they come after us for outstanding amounts due? Don't you need a discharge to purchase something like a car? Thank you in advance!
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Without knowing the details of your case or seeing the Order Confirming the Plan. . .
1. The underlying debt to the 2nd (the requirement to pay $$) was discharged in the 7 but the lien remained in place.
2. The 13 is removing the lien and paying taxes that would not have been subject to a 7 discharge.
3. Over the course of the 13 you will end up paying the taxes and 24% of the debt you ran up since you filed the 7.
4. Once you complete your Plan your case will close without the entry of a discharge.
5. Whatever you did not pay towards the debt you incurred after filing the 7 will still be owed, subject to any state statute of limitations for collection. (SOL may or may not have run while you were in the 13 - not sure on that issue).
As to purchasing a vehicle. . . you already have your discharge (from the 7). Cannot tell you if, as a result of the reporting of a second bk, you will have issues with getting financing. You may have to explain why there is no discharge in the second case. Whether or not you can get a potential lender to comprehend the issue is the question. You cannot force someone to loan you $$ and if the lender takes issue with the second case there isn’t much you can do about it.
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Des, THANK YOU so very much for taking the time to answer so thoroughly. Makes total sense. I sort of wished I would have thoroughly understood the lack of discharge, but hopefully it will be fine. Curious why people say that most people never finish their plan. Do you know why? Thank you!Comment
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The success or failure of a Plan depends upon the individual's financial situation over the course of the 3 to 5 years. Failure is a direct result of the inability to make the Plan and/or going forward mortgage payments. Lots of folks bite off more than they can chew and do not have a reasonable expectation of what they can or cannot afford. Others fail because of a job loss, drop in income, run up of unexpected medical bills etc. There is just no way to predict the success or failure of a Chapter 13 if, in the beginning, the debtor truly can afford it but stuff happens down the road.Originally posted by lilloarin View Post
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