Florida residents who are considering filing for Chapter 13 bankruptcy often have questions regarding what, if any, types of debts will remain after they complete their repayment plan and the discharge occurs. There are several categories of debts that normally will not be discharged under bankruptcy law.
Child and spousal support obligations are excepted from bankruptcy, and if a debtor fails to pay their domestic support amounts, they may have their Chapter 13 bankruptcy case dismissed. After the discharge, the ongoing obligation to pay child and spousal support will continue.
Other types of debts that will remain include moneys owed due to drunk driving, criminal restitution payments and fines and some long-term debts, such as the mortgage on a person’s home. Student loans backed by the federal government are generally not able to be discharged in bankruptcy, unless the debtor applies for and receives a hardship discharge of the amounts owed. A hardship discharge must be petitioned and paid for separate from and in addition to the original Chapter 13 petition after the case has been filed. In making the determination about whether to grant the request, the court will consider three factors. It will look at whether the person’s income will be insufficient to pay off the loans, whether the person’s income is likely to remain the same and whether the person has made a good-faith attempt to pay on the loans prior to filing the petition.
Filing for Chapter 13 bankruptcy involves assembling all of the debtor’s income, assets and debt statements and completing numerous schedules, all of which must be submitted along with the petition to the court. People who are interested in learning more about the protections that bankruptcy can provide may wish to speak with an attorney who has experience in this area of the law.