People in Kentucky who file for Chapter 13 bankruptcy protection may be able to have many of their unsecured debts discharged upon the successful completion of the process. However, there are a few kinds of obligations that are not eligible for discharge under Chapter 13 bankruptcy. Other kinds of debts may not be impossible to discharge, but it could be more difficult under this form of consumer debt relief.
Criminal fines and obligations to pay restitution as well as any drunk driving liabilities cannot be discharged in a Chapter 13 bankruptcy. Long-term obligations are also not eligible for discharge if the loan period extends beyond the period of the repayment plan that is required under this chapter and which is for a period of from three to five years. Any debts that have not been included in the plan are also not eligible for discharge. Educational loans backed by the federal government are usually not discharged in Chapter 13 bankruptcy, but they may be eligible if the repayment would cause the debtor to suffer an undue hardship.
Spousal and child support collection attempts may be stayed when a person files for Chapter 13 bankruptcy, but these debts won’t be discharged. A temporary stay on spousal and child support collections could also end up being lifted by the court during a bankruptcy filing. Post-discharge obligations to pay child and spousal support are not affected by the filing.
Filing for Chapter 13 bankruptcy protection can be a good solution to overwhelming financial obligations for people who earn a regular income. Other people may be better off filing for Chapter 7 bankruptcy. Those who unsure of the requirements for these forms of debt relief may find the advice of an attorney helpful.