Filing for Chapter 13 bankruptcy can be a blessing in disguise. While it may have a negative stigma in some circles it is a responsible and viable way to pay down your debts in a manageable manner. However, it is important to note that not all debts can be discharged through Chapter 13 bankruptcy.
What is a Chapter 13 discharge?
When you file for Chapter 13 bankruptcy you will enter into a three- to five-year repayment plan in which you will make monthly payments to a bankruptcy trustee who will then distribute these payments to your creditors. Following the completion of the plan many (but not all) of your remaining debts will be discharged. This means you are no longer required to pay them back and your creditors lose the right to collect payments from you. It is important to note, however, that not all debts can be discharged through Chapter 13 bankruptcy.
What debts are non-dischargeable through bankruptcy?
Not every debt can be discharged through the Chapter 13 bankruptcy process. For example, spousal support obligations and delinquent child support payments cannot be discharged through bankruptcy. In addition, tax liens cannot be discharged through bankruptcy although certain taxes may be dischargeable if they date back a certain number of years. Debts owed due to the willful and malicious injury to a person — deliberate injuries that do not have just cause — cannot be discharged through bankruptcy. Debts for death or personal injury due to drunk driving cannot be discharged through bankruptcy. Finally, if you fail to include a debt in your bankruptcy filing, it will not be discharged.
Learn more about Chapter 13 bankruptcy
Filing for Chapter 13 bankruptcy is something that most people in Long Island are not familiar with and an incomplete or insufficient filing could prevent a discharge of otherwise dischargeable debts. This post is for educational purposes only and does not contain legal advice. Those in New York who want to learn more about filing for Chapter 13 bankruptcy may find our firm’s webpage on this topic informative.