Many New Jersey residents choose a chapter 13 bankruptcy repayment plan to restructure their debt, especially if they need to get caught up on mortgage payments. They discipline themselves to make the payments over a three to five year period so that they can get a fresh start.
However, two bankruptcy code requirements, if not followed, could prevent them from getting a discharge at the end of their plans.
Complete Your Debtor Education Class
First, you have to complete a debtor education/financial management class and get a certificate of completion. Many people forget to do this, concentrating on getting the payments out every month.
I recommend that my clients complete the class as soon as their plan is confirmed. That way it is done, and you do not have to remember.
Keep Current on Alimony & Child Support
Second, if you are responsible for paying alimony, child support, or some other domestic support obligation (DSO), whether or not you were behind on same when you filed the bankruptcy, you must certify at the end of your plan that all domestic support obligations that have come due during the pendency of your case have been paid.
If you state on your certificate that it was not paid, then the judge will have to hold a hearing to determine whether or not your failure to pay is beyond your control. If the judge finds that your failure to pay is not excusable, your case will close and you will not get your discharge!
What You Need to Do
In short, be sure to do the following to ensure the issuance of a discharge:
- Take the financial management class right away and get the certificate. Then have your attorney file it with the court.
- Make all of your DSO payments during the pendency of your plan
- Contact your attorney as your plan comes to an end to be sure that the appropriate certification is filed on your DSO.
Chapter 13 bankruptcy can be a great way to get caught up on important debts like taxes, mortgage payments, and DSOs. But if you don’t follow up at the finish line, you could risk losing that fresh start!
If you have more questions about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.