Recover money after the bankruptcy declaration of chapter 13

Table
  1. Do you get money back after Chapter 13?
    1. Plan Completion and Case Closure
    2. Refunds and Address Updates
    3. Restarting Payments to Creditors
    4. Wage Order Vacating

Do you get money back after Chapter 13?

Chapter 13 bankruptcy is a legal process that allows individuals to reorganize their debts and create a repayment plan. Unlike Chapter 7 bankruptcy, which involves the liquidation of assets to pay off debts, Chapter 13 bankruptcy allows individuals to keep their assets while making monthly payments to creditors over a period of three to five years. One common question that arises during the Chapter 13 bankruptcy process is whether individuals can receive money back after completing their repayment plan.

Plan Completion and Case Closure

After completing all required payments under the Chapter 13 repayment plan, including any tax refunds owed, the Chapter 13 Trustee will file a Certificate of Final Payment with the Bankruptcy Court. This certificate informs the court that the debtor has fulfilled all necessary payments under the plan. A copy of the certificate will be mailed to the debtor and their attorney.

Do you get money back after Chapter 13?

It is important to note that individuals should not stop making their plan payments until the Trustee's office has filed the Certificate of Final Payment. It is crucial to continue making payments until the court acknowledges the completion of the repayment plan.

Refunds and Address Updates

If individuals are due a refund in their Chapter 13 bankruptcy case, the refund will usually be issued mid-month following the completion of the case. However, it is essential to keep both the address current with your attorney and the Bankruptcy Court to ensure the receipt of important documents and any refund.

Updating the address is crucial because if individuals do not receive their refund due to an outdated address, it may cause delays and complications in receiving the funds. It is the individual's responsibility to keep both their attorney and the Bankruptcy Court informed of any address changes.

Restarting Payments to Creditors

If the Chapter 13 Trustee was making ongoing, long-term payments on behalf of the debtor, such as child support payments, mortgage payments, or student loan payments, it is essential to restart these payments directly to the respective creditors. Individuals should not wait for a payment book or a reminder from these creditors to begin making payments. It is recommended to contact the attorney if there are any questions or concerns regarding the restart of payments to creditors.

Wage Order Vacating

Upon closing the Chapter 13 bankruptcy case, the Chapter 13 Trustee will request that the Bankruptcy Court vacate the Wage Order, if one was issued. When the Court vacates the Wage Order, it instructs the debtor's employer to stop deducting the plan payment from the debtor's wages. The debtor and their attorney will receive a copy of this vacating order.

If the debtor's employer continues to deduct plan payments from their wages after the vacating order is issued, it is recommended to provide the employer with a copy of the vacating order and/or contact the attorney for further assistance.

In conclusion, individuals may be eligible to receive a refund after completing their Chapter 13 bankruptcy repayment plan. It is crucial to keep the address current with both the attorney and the Bankruptcy Court to ensure the receipt of important documents and any potential refund. Additionally, individuals should restart payments directly to the respective creditors if the Chapter 13 Trustee was making ongoing payments on their behalf. It is important to follow the instructions provided by the Trustee's office and consult with the attorney for any questions or concerns regarding the Chapter 13 bankruptcy process.

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