Your qualified debts will be discharged as long as you follow the requirements of a chapter 13 filing. Those include taking a financial management course and certifying that all payments have been made.
Despite these benefits, there are limitations to what this process can do. According to the U.S. Courts, there are several debts that will not be discharged in a chapter 13 bankruptcy, such as the following:
- The mortgage on your home (though a second mortgage may be eliminated)
- Certain taxes, especially if the debt is less than three years old
- Most student loans
- Child support or alimony payments
- Fines or penalties related to criminal activity or a civil lawsuit regarding certain personal injury cases, such as drunk driving
Any debts that were occurred due to fraudulent activity or other personal injury matters could be eligible for discharge. However, the U.S. Courts note that a creditor is able to file a motion to make the debt nondischargeable.
Even if you have these debts, you should recognize that a chapter 13 filing could free up money to pay them because the amount you owe to other creditors may be lowered. When you file for bankruptcy, an automatic stay is placed on all your debts, allowing you to get your finances in order.
While this information may be useful, it should not be taken as legal advice.