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What Types of Debts Are Dischargeable?

Detroit Chapter 13 Lawyer

What Types of Debts Are Dischargeable Under Chapter 13?

The type of debts usually discharged at the end of a Chapter 13 plan include "non-priority unsecured" debts. Examples of non-priority unsecured debt are credit card debt, medical bills, personal loans, old tax obligations and others. These debts are discharged at the end of a Chapter 13 plan, but only after you have paid them down over time. These types of debt are discharged under a Chapter 7 plan, but the difference is that in a Chapter 7, there is no payment plan leading up to the discharge. Contact a Detroit Chapter 13 attorney from the Law Offices of Marshall D. Schultz in Detroit or Southfield for a free evaluation of whether Chapter 13 is the best option for you.

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Debts that are discharged only under a Chapter 13 plan include debts you have incurred because of willful or malicious damage to property, debts incurred to pay non-dischargeable taxes, and certain debts arising from a divorce or separation property settlement. Usually, tax debt is non-dischargeable. But if you paid your taxes using a credit card, and then fail to pay your credit card bill, that credit card debt is dischargeable.

Lastly, certain debtors' security interest in your property can be discharged using a Chapter 13 plan. A mortgage or a car loan creates a lien on your property. These types of liens can be "stripped" or "crammed down" using a Chapter 13 plan by paying the creditor what the property is now worth, and then having the remainder of the balance classified as unsecured and then discharged.

Contact us today for an evaluation of your situation so that we can determine whether a Chapter 13 bankruptcy filing is right for you. We have over 25 years of experience representing debtors in bankruptcy. See for yourself what our clients have said about their experiences with the Law Offices of Marshall D. Schultz.

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