Not all debts dischargeable in Chapter 13

When Florida residents are overwhelmed by their financial obligations, bankruptcy may be a good option. The two major forms of consumer bankruptcy are Chapter 7 and Chapter 13. However, it’s important to realize that federal laws impose some limits on the amount and type of debt that can be discharged by a bankruptcy court.

Most types of consumer debt, such as credit card debt and bank loans, can be subject to discharge in both Chapter 7 and Chapter 13 bankruptcies. However, other kinds of debts remain. These include spousal and child support payments as well as other obligations deemed to be in the nature of domestic support. While an individual in Chapter 13 bankruptcy can include these payments in the court-supervised repayment plan, the obligation to make them remain, and they are deemed to be priority obligations.

In one case, a debtor attempted to include legal fees owed to his ex-wife’s lawyer in his Chapter 13 dischargeable debt. The court ruled against him and declared the debt to be nondischargeable. While there were legal complexities that contributed to the case, the debtor nonetheless found that he was unable to rid himself of debt that he owed, not to his ex-wife, but her lawyer.

Debtors who are concerned about whether bankruptcy will eliminate certain debts may benefit from speaking with an experienced lawyer. Legal counsel can explain the different forms of bankruptcy and the eligibility requirements attendant to each. Not everyone can qualify for Chapter 13, as is it intended for those debtors who have a regular source of income that will enable them to make the payments under the court-approved plan.