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Discharging debt under Chapter 13

An Arkansas resident who files for bankruptcy protection may be able to have many debts discharged. However, in a Chapter 13 bankruptcy, there are requirements that must be met before this is done. For instance, an individual must prior to filing pass a financial management course that is approved by the court having jurisdiction over the matter. Furthermore, a debtor must make payments to creditors under a court-approved plan that will last for a period from three to five years.

There are certain documents and other information that usually must be filed along with the Chapter 13 petition. The debtor will need to provide a schedule of assets and liabilities as well as a schedule of current income and expenses. In addition, a copy of the federal income tax return for the most recent tax year must be provided.

As long as the debtor is complying with the terms of the plan, creditors are not allowed to take any further action to collect on the debt, including filing lawsuits or attempting to obtain garnishments. Debts that are not subject to discharge in bankruptcy include alimony, child support, certain federal income tax obligations, student loans that have been issued or guaranteed by the government and other obligations.

Those who are going through foreclosure or facing other legal action from creditors may wish to file for Chapter 13 bankruptcy. Doing so may allow them to keep their property while making payments to creditors. Once a repayment plan has been completed, some remaining unsecured indebtedness may be discharged by the court, which means that the debtor is no longer obligated to pay it. Those who want to learn more about personal bankruptcy and the benefits it can provide may wish to talk to an attorney.

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