What debts can be included in a Chapter 13 bankruptcy?

Chapter 13 bankruptcy allows individuals to reorganize their debts and create a repayment plan over three to five years. The types of debts that can typically be included in a Chapter 13 bankruptcy include unsecured debts and secured debts. Unsecured debts are those that are not backed by collateral. Common examples of unsecured debts include credit card debts, personal loans, medical bills, and certain types of income tax debts. It is important to note that not all income tax debts can be discharged, as specific criteria must be met. Secured debts are loans backed by collateral, such as a mortgage or an auto loan. In Chapter 13, individuals can often keep their secured assets while making arrangements to catch up on their outstanding payments through the repayment plan. If individuals are behind on their mortgage or car payments, they can typically include those debts in their plan to avoid foreclosure or repossession. Certain types of debts are excluded from Chapter 13 bankruptcy. For example, student loans and child support obligations typically cannot be discharged through this process. Each case is unique, so it is advisable to consult the current resources from the Chapter 13 Office of North Carolina to understand specific eligibility and to explore options for managing debts effectively.