Chapter 13 bankruptcy is often referred to as a “wage earner’s plan” because it allows individuals with regular income to reorganize their debts into a manageable repayment plan. Over three to five years, filers make monthly payments toward their debts, and upon successful completion of the plan, many remaining debts can be discharged. At Tadross Law, we assist Pennsylvanians in understanding which debts qualify for discharge and how Chapter 13 bankruptcy can offer meaningful financial relief.



Debts Commonly Discharged in Chapter 13

• Credit Card Debt
• Credit card balances, including late fees and over-limit charges, are generally considered unsecured debts. These are commonly discharged at the end of a Chapter 13 plan.
• Medical Bills
• Medical expenses can add up quickly and are one of the most common forms of unsecured debt. Chapter 13 allows for partial repayment and discharge of the remainder.
• Personal Loans and Payday Loans
• Unsecured personal loans, including payday loans, are typically dischargeable unless fraud is involved.
• Utility Bills
• Past due utility bills like gas, water, or electric service can be included in the repayment plan and may be discharged if unpaid by the end.
• Old Income Tax Debt
• Certain older tax debts may be discharged if they meet specific IRS criteria, such as age of the debt and timely filed returns.
• Lease and Contract Obligations
• If you’ve broken a lease or defaulted on a contract, the financial penalties may be discharged in Chapter 13.
• Deficiency Balances After Repossession or Foreclosure
• If your car or home was repossessed or foreclosed and you still owe money, that balance can often be discharged.

Debts That Are Not Discharged

It’s equally important to understand which debts cannot be discharged under Chapter 13. These typically include:

• Student loans (unless undue hardship is proven)
• Recent tax debts
• Child support and alimony
• Criminal fines and restitution
• Debts for personal injury caused by DUI

Why Chapter 13 Can Be a Smart Choice

Unlike Chapter 7, which requires liquidation of non-exempt assets, Chapter 13 allows you to retain your property while catching up on secured debt like mortgage arrears or car payments. Additionally, Chapter 13 can provide a broader discharge than Chapter 7 for certain debts.

At Tadross Law, we help clients throughout Pennsylvania navigate the complexities of Chapter 13 bankruptcy. Our legal team will evaluate your debts, explain what relief is available, and develop a personalized repayment strategy that works for your financial future.

Conclusion

Chapter 13 bankruptcy offers a pathway to regain control over your finances while discharging many unsecured debts. If you are struggling with overwhelming bills in Pennsylvania, Tadross Law is here to provide the legal guidance you need. Contact us today to schedule a consultation and take the first step toward financial stability.