Chapter 13 bankruptcy offers a valuable pathway for Tennessee residents who want to reorganize their debts while keeping their assets. Unlike Chapter 7, which involves liquidating assets to pay creditors, Chapter 13 allows you to set up a repayment plan—typically lasting three to five years—based on your income and ability to pay. Once the repayment period ends and all obligations have been met, you may be eligible for a discharge of remaining debts.

At Kenneth C. Rannick P.C., we assist Chattanooga residents in understanding how Chapter 13 can help them achieve financial stability. Here’s what you need to know about which debts may be discharged under Chapter 13 in Tennessee.

Common Dischargeable Debts in Chapter 13

Under Chapter 13, many unsecured debts can be discharged once the repayment plan is completed. These typically include:

• Credit card debt
  Balances, late fees, and penalties can be wiped out after your plan is completed.
• Medical bills
  Outstanding balances from doctors, hospitals, or clinics are often dischargeable.
• Personal loans
  Unsecured loans from banks or other lenders can be included in your discharge.
• Past-due utility bills
  Old balances for electricity, water, or gas services may be discharged.
• Older tax debts
  Some income tax debts may qualify if they meet specific age and filing requirements.

Debts That May Be Partially Paid Then Discharged

Chapter 13 can also provide partial relief for debts like:

• Deficiency balances on repossessed vehicles
  If your car was repossessed and sold for less than you owed, the remaining balance may be discharged.
• Lease obligations and rent arrears
  Back rent and unpaid lease balances might be eligible for discharge after the plan.
• Certain divorce-related obligations
  While child support and alimony are never dischargeable, debts related to property settlement may be under specific circumstances.

Debts That Are Not Dischargeable Under Chapter 13

While Chapter 13 offers broader relief than Chapter 7, some debts cannot be discharged:

• Child support and alimony
  These obligations must be paid in full during the repayment period.
• Student loans
  In most cases, student loans are not dischargeable unless you can prove undue hardship through an adversary proceeding.
• Recent tax debts
  Tax debts that are less than three years old or were not filed properly are typically not dischargeable.
• Criminal fines or restitution
  Any court-ordered fines or payments for criminal offenses cannot be eliminated.

Why Legal Guidance Matters

Chapter 13 bankruptcy laws are complex and require careful analysis of your financial situation. The right legal guidance can help ensure that you maximize the relief available to you and avoid costly mistakes in your repayment plan. At Kenneth C. Rannick P.C., we assist individuals and families throughout Chattanooga with tailored bankruptcy solutions designed to protect their rights and give them a fresh start.

Summary

Chapter 13 bankruptcy allows many types of debt to be discharged after a structured repayment plan is completed. Credit cards, medical bills, personal loans, and certain older tax debts are generally eligible for discharge. However, obligations like child support, recent taxes, and most student loans remain non-dischargeable. Legal support is key to navigating these rules effectively. Kenneth C. Rannick P.C. is here to help Chattanooga residents move forward with confidence.