Debts Remaining After a Chapter 13 Discharge

A Chapter 13 bankruptcy discharge will not erase all debts. Some debts may not be discharged in Chapter 13. There are some exceptions to Chapter 13 discharge, however:

Must Read: https://www.lawsuccess.us/bankruptcy-law/

Claim for child support or spousal support (alimony).

  • Education loans
  • Driving under the influence
  • Restitution obligations and criminal fines

Some long-term obligations such as home mortgages that go beyond the term of the plan may be required.

Any other debts that are not covered by a wage-earner program

Below are more details about these exemptions to Chapter 13 discharge. Additional information can be found at Exempt Property in Chapter 13 Bankruptcy, Chapter 13 Debt Discharge and What are the Debtor’s obligations under Chapter 13?

What are the Domestic Support Obligations under Chapter 13?

Domestic support obligations are debts that were incurred prior to or after bankruptcy and must meet the following conditions:

They are due to your spouse or ex-spouse, your child, or a government agency

  • They can be used to support or alimony.

This obligation should be included in a “divorce decree”, separation agreement, property settlement arrangement, court order, administrative determination, or court order. Section 101(14A), Bankruptcy Code.

Never Miss: https://www.dailylawstudy.com/debts-remaining/

  • Spousal Support and Child Support

You can have a discharge of child support obligations and spousal support obligations depending on whether you file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.

A Chapter 7 filing won’t have any effect on these obligations, but a Chapter 13 proceeding might stop collection efforts for these debts at least temporarily.

The Bankruptcy Code does not allow creditors to stop or “stay,” their efforts to collect debts. However, all bankruptcies end or “stay”, creditors’ attempts to collect. Only the creditor attempting to collect from the “property” of the estate can collect child support and spousal maintenance. Different chapters of the Bankruptcy Code define the “property” of an estate differently.

Chapter 13 of the Bankruptcy Code treats the debtor’s earnings as part of the estate. The repayment plan is made from the debtor’s current income and not from any liquidated assets.

Support collections can be stopped in Chapter 13. A court may lift the stay to allow withholding child support and alimony from the debtor’s earnings. It will depend on the extent of child and spouse support provided by the wage-earner plan. The court may lift the stay if it believes that the plan is not adequate.

  • Domestic Support Options are High Priority Debts

Revisions to the Bankruptcy Code in 2005 made domestic support obligations a higher priority. Discharge of domestic support obligations is now exempted.

If the debtor fails pay any domestic support obligation due after filing the petition, a Chapter 13 case can be dismissed. A governmental unit can be assigned domestic support obligations. However, the amount may not exceed 100% if there is no income available for the plan for five years.

The change requires that Chapter 13 debtors must either certify that they have paid all domestic support obligations, or that their confirmed plan includes pre-bankruptcy domestic assistance obligations. The priority of domestic support obligations was moved up to the top of this priority list. Additionally, preference provisions were modified to protect domestic support transfers against avoidance.

Can Alimony be Discharged in Bankruptcy

No. No. Same applies to child support obligations. These obligations continue even after bankruptcy proceedings are over.

  • Student Loans

A Chapter 13 bankruptcy is not usually used to discharge educational loans that are guaranteed by the United States government.

Also Read: https://www.lawabout.co.uk/debts-remaining-after-discharge/

However, they may be dismissed if the court determines that the loan is causing undue hardship to the debtor or their dependents. To be eligible for a hardship discharge, the debtor must prove that:

They are unable to make any payments at the time of filing bankruptcy.

They won’t be able make future payments. Before the discharge of other debts can be granted, the debtor must file for hardship discharge. The standard bankruptcy fees do not include the application for hardship discharge. This must be paid after the case has been filed.

The requirements for granting hardship relief on a student loan are not defined in the Bankruptcy Code. Although courts may use different criteria, they will often use a 3-part test to determine eligibility.

Income: The debtor who is forced to repay the student loan will be unable to provide a minimum level of living for themselves and their dependents.

Duration: For a substantial portion of the repayment period, the financial circumstances that meet the income test in (1) will be maintained.

Good faith: The debtor must have tried to repay the loan in good faith before filing for bankruptcy.

Most Popular: https://www.flowinglaw.com/bankruptcy/

Find solutions to your Chapter 13 issues by contacting an attorney

It is not an easy task to manage debt. Understanding your rights will help you to get rid of your debt while still protecting your assets. A local bankruptcy attorney can help you plan your path to financial freedom.

related articles

Navigating the Maze: Understanding Directors Disqualification Orders

In the complex and ever-evolving world of corporate governance, a Directors Disqualification Order stands as a critical instrument, ensuring accountability and integrity at the...

Legal Tint in NC: The Clear-cut Guide to Keeping it Cool and Legal

Hey there, North Carolina folks! So, you're looking to soup up your ride with some sleek window tint? Good call! Not only does it...

Attorney-Client Privilege: The Sacred Bond of Trust and Confidentiality

Have you ever wondered why lawyers often remain tight-lipped about their conversations with clients? Well, that's not just a matter of professional decorum. It's...

The Ethical Boundaries of Legal Practice: Navigating Gray Areas – A Guide to Integrity in Law

Hey there, aspiring legal eagle! Navigating the realm of law isn't just about mastering statutes or court protocols. It's also about grappling with...

How to Prepare for the Mediation of Your Dispute?

Mediation has long been considered an effective means for settling disputes amicably and without litigation, with parties agreeing to settle claims at an informal...

A Guide to Notary Services

What is a notary public? Notaries Public are professionals appointed by provincial governments to act as official witnesses at document signing ceremonies. Notaries typically act...

Unlocking the Potential of Multi-let Management in the UK

In the dynamic world of property management, landlords and investors are constantly seeking innovative strategies to maximize rental yields and optimize their investments. One...

Tips to improve your chances of dispute resolution success

What is dispute resolution? Effectively, dispute resolution refers to any method for settling disagreements that arise between parties without necessarily turning to litigation as the...

Ten Tips to Look for When Choosing an Immigration Lawyer

Here are 10 things to consider when selecting an immigration lawyer If you don't have a lawyer to help you, the process of applying for...

Subscribe ⇘

1,000FansLike
1,000FollowersFollow
1,000FollowersFollow

Recent Posts

5 Variances Involving Managers and Agents

If you are at the amusement Company, You Have Probably encounter various gift agents, specially managers and agents. While a few can wrongly view...

Understanding the Personal Injury Settlements and Health Insurance Claims

There is a good chance that other people will try to take your personal injury settlement. One of the most surprising things is that...

The Most Common Truck Accident Types

The trucking industry is regulated by the FMCSA, which estimates that over 100,000 truck accidents leading to injuries happen every single year in byways,...

Ten Tips to Look for When Choosing an Immigration Lawyer

Here are 10 things to consider when selecting an immigration lawyer If you don't have a lawyer to help you, the process of applying for...

What are “Allied Business Services”?

Allied Business Services, a Zeeland-based debt collector, is located in MI. There are a number of complaints against Allied Business Services. These include violations...
spot_imgspot_img