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Debts that can’t be discharged in Chapter 13 cases

While many debts may be discharged through a Chapter 13 bankruptcy, there are some that will not be. In a Chapter 13 bankruptcy, Florida debtors are subjected to a court-approved payment plan that lasts from three to five years with most debt balances remaining after the plan has been completed discharged.

Two unsecured debt types that will not be discharged at the end of a Chapter 13 bankruptcy are child support and alimony. The bankruptcy code specifically disallows discharging these debts. During the repayment period itself, however, collection activities to recover back amounts owed may be stayed. Others that are not dischargeable in bankruptcy include criminal case restitutions and fines. Similarly, liabilities owed in personal injury cases will not be discharged if the person was driving drunk.

Long-term debts such as mortgages that will continue beyond the end of the repayment plan will also not be discharged. In most cases, student loans can’t be discharged unless the person files and pays separately to request they be discharged through a hardship. If the court finds that making the borrower repay the student loans would place an undue hardship on them and their family, the court may grant a discharge of the student loans. The person must have made a good-faith effort to try to repay the loans, must not have sufficient means to repay them at the time of filing bankruptcy, and the financial situation must be unlikely to change.

One caveat about mortgages and Chapter 13 bankruptcy is that the chapter may be used to strip second mortgages on property even though the primary mortgage will continue. The chapter is also a good choice for people who are in danger of foreclosure and who need additional time to catch up on their mortgage payments. Not every debtor will qualify for Chapter 13, however, and a lawyer can outline the eligibility requirements.

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