Can I Discharge Debt in Chapter 13 Bankruptcy?
Chapter 13 allows the debtor to propose a plan to repay their debt through a structured, court-approved plan. In some cases, the debtor will be required to repay all of the debt. In other cases, the debtor is only required to repay part of the debt.
Discharge of Debt in Chapter 13
In many cases, the debtor's Chapter 13 payment is determined by their ability to pay their unsecured debt. As such, in certain cases, if the debtor's budget only allows for repayment of part of the debt, the remaining debt can sometimes be discharged if the debtor successfully completes the Chapter 13 plan by making all required payments.
Many factors affect whether a debtor will be permitted to discharge unsecured debt in a Chapter 13 case. These factors include:
- the value of any non-exempt assets
- household income in relation to reasonable and necessary household living expenses
- additional income that may come available during the plan period, such as tax refunds and bonuses
- inheritance proceeds