What debts remain after a Chapter 13 bankruptcy?
While Chapter 13 bankruptcy may eliminate some debts, others will remain after the repayment period ends. For instance, Florida parents who still owe child support will have to make those payments even after obtaining a discharge. Student loans, liabilities stemming from a drunk driving incident and other fines or restitution may also remain after a discharge. Mortgages may also remain if their term is longer than the repayment period.
If an individual who files for Chapter 13 bankruptcy owes child support, a stay may granted against further collection efforts. However, that may only be true if the repayment plan makes provisions for child support payments to be made. If the plan does not account for these payments, a judge may remove the stay against such collection efforts. Additionally, an individual would still be responsible for child support that would have been due after he or she receives a discharge.
In some cases, a student loan may be discharged if certain provisions are met. For instance, a discharge may be granted if paying the loan would constitute a financial hardship for a debtor. The debtor must also show that a financial hardship would exist for a long period of time and that a good faith effort was made to pay the loans in the past.
Those who are thinking about filing for bankruptcy may wish to talk to a lawyer. Doing so may make it easier to complete all required steps properly the first, which may prevent the case from being thrown out or otherwise delayed. Legal counsel may also explain the types of debts that may or may not be discharged when petition for bankruptcy petition. Another benefit for debtors is that filing for bankruptcy may provide an automatic stay of some or all collections efforts.