Chapter 13 bankruptcy can wipe out most kinds of debts and leave you with a much brighter financial picture. But Chapter 13 can’t discharge all types of debt you’ve taken on. Some debts will remain after your bankruptcy, although you’ll be in a much better position to handle them. Here’s a closer look at how it works.
Which Debts Can Be Discharged By Chapter 13 Bankruptcy?
Your Chapter 13 bankruptcy plan creates an affordable route to satisfying your creditors and starting to rebuild your financial stability. The kinds of debt that can typically be eliminated are credit card debt, medical bills, utility bills, evictions, repossessions, and personal loans. You can also wipe out debts owed to gyms, clubs, and other personal services.
Which Debts Cannot Be Discharged by Chapter 13 Bankruptcy?
Certain types of debt are nondischargeable in Chapter 13 bankruptcy no matter your circumstances. These include child support, alimony, government fines and fees, drunk driving debts, some taxes, criminal fines and restitution, and any penalties you may owe for a willful or malicious act. You also may not receive a discharge any debt you simply forgot to list in your bankruptcy paperwork, so it’s important to be thorough when filling it out.
Is It Impossible to Wipe Out Student Loans With Bankruptcy?
It’s difficult, but not impossible, to discharge your student loans through bankruptcy. With the help of an experienced bankruptcy attorney, you can attempt to show the court that your student loans are causing an undue hardship under bankruptcy code 11 U.S.C. Section 523(a)(8). However, this requires a separate lawsuit, called an adversary proceeding, that requires a separate retainer, and can be expensive.
If I’ll Still Have Debts, Why File for Chapter 13 Bankruptcy?
Don’t avoid Chapter 13 bankruptcy simply because it won’t eliminate all of your debts. It comes with some huge benefits. First of all, it will stop almost all creditors from hassling you, even creditors that have debts that will not ultimately be discharged. It can also help you save your house, car, tools, heirlooms and other treasured personal belongings so you don’t lose them and shake up your life. Plus, you’ll have affordable monthly payments, improve your credit score in the long run and wipe out an enormous chunk of old debt that’s been weighing you down. Imagine being free of all those nagging bills. Chapter 13 bankruptcy finally helps you release a heavy burden of stress from your life.
Sawin & Shea – Indianapolis Bankruptcy Attorneys
Filing for bankruptcy is not the end. It’s the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of the overwhelming debt and advise you on life after bankruptcy. We are here for you during this life-changing process. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.