Getting closer to discharge!

[knitty]

I posted a few months ago that the case seemed to be closing early (5 yrs. would be up this coming May) as we had gotten a refund from Trustee and told we needed to get the 2nd counseling class done ASAP. Today we got the Notice of Final Report and Account, etc. with deadline for objections in 30 days. There are over $13,000 in claims being discharged without payment, which is apparently why we're finishing early. One is over $10,000 with Chase...which boggles me because they were the ones pushing us into the BK when they sued! I'd love to know the reason behind that ...although I'm just glad this is getting done.
So keep the faith all of you, there is light at the end of the tunnel and good lessons learned.

[AngelinaCat]

Congratulations! Let us know when you get the actual discharge--CH13s operate differently than CH7s--so we can give you your Discharge Party!

[knitty]

you'll be one of the first to know...I want to parteeeee!!

[kornellred]

You might be on the lookout for Chase sending you a 1099 form for the forgiven debt, if they in fact forgive it. You will have to pay taxes on it if they do.

[dmc-2008]

I didnt think you had to pay tax on bk debt? I thought that is why you do a bk, one reason anyway.

[Scott50]

I'm a bit confused.. You're in a 100% payback and they filed claims but weren't paid but the debt is being discharged through CH13?

[knitty]

That is correct...on one of the pages of the notice (Notice of Filing Chpt. 13 Trustee's Final report....)we got is a listing in a declaration that says, in part,
"Amount of unsecured claims discharged without payment...$xxxxxxx".
Under Scheduled Creditors there are 4 with claims adding up to the above amount. It gives the Claim Scheduled,(amount of claim) , then N/A under Claim Asserted and Claim Allowed, and zero under Principal Paid and Int. Paid.
I haven't gone back through the yearly auditing forms to see if they were always not getting paid, or not, it didn't seem to matter much at that point. I am curious though!

[knitty]

Getting Closer to discharge

Why would it be considered forgiven and not discharged?

this is in response to kornelreid

[kornellred]

Response for knitty - a discharged debt still exists after discharge. All the bankruptcy discharge means is that the creditor who owns the debt can no longer take any action to collect it. Debt forgiveness (or cancellation) is the prerogative of any creditor at any time, but there are rules which the creditor must follow when deciding to cancel debt having to do with events and circumstances. I posed a question about the issuance of Form 1099-C after Chapter 13 discharge and the singular response from one of the moderators was that, yes, creditors can, and sometimes do, cancel debt after it is discharged. From what I understand, the debtor is not liable for taxes on discharged debt that has been forgiven (canceled).

[sophieanne]

That is interesting because my attorney and I were just talking about this subject. Chase has not filed for $21,000 in my chapter 13, 100% plan. My attorney said that's good news for you..that means they do not get paid and they have no recourse whatsoever after you are discharged. They can't say we didn't file because we thought we'ld wait for the case to be over. They had their chance and turned it down. All is done and over with. If they were to send you a tax form you would just attach it with the discharge you receive from the court (which shows all discharged accounts) and send it in with your taxes and you wold not have to pay tax at all.

[knitty]

Then this is a moot point for the debtor, right? The debt is discharged, there is no liability for it or the taxes...debtor is DONE