Discharging Debt in Bankruptcy
Whether you file Chapter 7 or Chapter 13 bankruptcy , the general goal is to regain control of your finances and get out of debt. Chapter 7 bankruptcy is known for discharging or eliminating debt while Chapter 13 helps reorganize debt with a payment schedule. Certain debts in Chapter 13 may still continue to be paid by the debtor if it doesn’t qualify for a discharge.
When a debt is discharged in bankruptcy the debtor is no longer responsible for repaying it back to the creditor. There are certain debts that qualify for discharge including medical bills , credit card debt , personal loans, lawsuit judgments and fees related to lease and contract obligations. While such debts can be discharged in Chapter 7 or Chapter 13, there are certain types of debt that obtain discharge though Chapter 13 alone.
Debts That are Not Dischargeable in Chapter 7 but in Chapter 13
Certain debts are not dischargeable in Chapter 7 but in Chapter 13, these may include court fees, HOA fees, debt related to retirement plan loans, marital debt outside of a divorce agreement and other debt not dischargeable in Chapter 7 bankruptcy.
Certain types of tax debt cannot be discharged such as alimony, child support, debt incurred related to a person’s death or injury during intoxication also restitution including penalties and fines for breaking the law. Student loan debt and regular income tax debt may be discharged under strict circumstances; these debts are rarely discharged but it is possible. There are a few circumstances in which a debt may not get discharged. Examples may include if the debt stems from fraud, malicious acts, larceny, embezzlement, or if a debt is not listed in your bankruptcy petition.