In a Chapter 13 bankruptcy, your debts will be broken down into secured debts, priority unsecured debts and non-priority unsecured debts. For secured debts, which are guaranteed by collateral, if the collateral secures your obligation, you will have to pay or surrender it. This is usually property like a car or house.
Priority unsecured debts do not go away in a bankruptcy. In your Chapter 13 plan you will be required to pay priority claims in full. Non-priority unsecured debts is where the majority of your debts will be discharged in a Chapter 13 bankruptcy. Read on to find out what debts typically qualify for discharge.
Qualifying Debts in Chapter 13 Discharge
The following types of debt are a handful of the most common types that are considered non-priority unsecured debts and will qualify for discharge.
- Medical bills – if your medical care was not fully covered by your insurance and you were unable to pay, which led to you incurring debt, it can be discharged under Chapter 13.
- Credit card debt – at the conclusion of your repayment plan, any remaining credit card debt will be discharged.
- Old tax obligations – certain, older income tax balances might be deemed non-priority debts, meaning you can get them discharged as long as you did not commit fraud.
- Personal loans – if you have personal loans that are not secured by collateral, it can get discharged at the close of your Chapter 13.
- Breach of contract/negligence-related debt – a breach of contract or negligent act that caused property or personal harm can result in a judgment against you. Typically, this judgement can be discharged as long as the debt is not for a willful or malicious injury to another.
There are many other debts that may qualify for discharge under a Chapter 13 bankruptcy. Consult a qualified and experienced bankruptcy lawyer to learn about all the ways Chapter 13 bankruptcy can help you.
New Jersey Lawyer Can Get You a Fresh Start
You and your family should not be burdened with unmanageable debt, and that is why bankruptcy is an option. In New Jersey, the Law Office of Joel R. Spivack helps clients through the bankruptcy process and on to a fresh financial start. With over 25 years of experience, Mr. Spivack is more than ready to help you get where you want to be. Do not let another day of debt go by. Fill out the online form to contact him and begin discussing your options.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.