Is it true that even if a Chapter 7 won forgive certain debts, a Chapter 13 might?
Yes. A Chapter 13 discharge is greater, because it forgives more debt in exchange for pledging your income to the Court for at least three years. As long as the plan meets the tests above, the potentially nondischargeable debt could merely be an unsecured claim subject to the same treatment as all other unsecured claims. Taxes less than three years old (from the date the return was due) are not forgiven, but the interest and penalties can be frozen, so that only the debt owed at the time of filing would have to be paid, and an extended period of time could be granted within the plan to pay it. Back child support and alimony can be cured through a plan, as well, as long as future payments resume immediately after filing. Student loans, unfortunately, cannot be paid in full through a plan, and are also not forgiven in a Chapter 13, unless the Debtor, in a separate lawsuit filed in the bankruptcy case, can show undue hardship.
Related Questions
- I received a discharge in a Chapter 7 Bankruptcy, but some debts that could not be discharged remain. Can filing a Chapter 13 help me with these debts?
- Are certain debts dischargeable in Chapter 13 that are not dischargeable in Chapter 7?
- Is it true that even if a Chapter 7 won forgive certain debts, a Chapter 13 might?
