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Nondischargeable debts after bankruptcy

As Pennsylvania residents may know, Chapter 13 bankruptcy is a way to reorganize debt and set up a repayment plan to pay creditors. Generally, at the end of the repayment, many remaining debts are discharged. However, some debts are not dischargeable. For instance, restitution in criminal cases or fines cannot be discharged. Debts associated with impaired driving and some forms of extended debt are not either.

Student loans backed by the U.S. government are not generally dischargeable debts. However, it might be possible to apply for a discharge based on hardship, and the debtor applies for a discharge based on hardship before other debts are discharged. In such cases, the court might ask the debtor to show that paying back the debt will be a hardship that precludes paying normal living expenses. In addition, the debtor must show that finances are unlikely to improve. The debtor must also demonstrate that payments were made on the loan before filing for the discharge during the bankruptcy process.

Other debt collection efforts involving alimony and child support payments may be stayed in the same way other collection activities are during bankruptcy. However, the debtor is expected to make plans to pay support during the repayment period. If this is not done, the court may overturn the stay and allow withholding of child and spousal support from the debtor's paycheck. Recent changes to the bankruptcy code make these forms of debt a high priority.

When a debtor files for Chapter 13 bankruptcy, it may be helpful to consult with an attorney. The attorney may advise which debts are dischargeable and whether others are eligible for a hardship discharge.

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