Filing for Chapter 13 bankruptcy can be a lifeline for North Carolina residents facing overwhelming debt. Unlike Chapter 7, which involves liquidating assets, Chapter 13 allows individuals to reorganize their debts and establish a repayment plan over three to five years. One key advantage of Chapter 13 is the potential to discharge certain debts once the repayment plan is successfully completed.

At the Law Office of Calvin Craig, we are committed to helping individuals in Raleigh and surrounding communities understand how bankruptcy law applies to their specific situations. Below, we explore the types of debts that can be discharged under Chapter 13 in North Carolina.

What Is a Chapter 13 Discharge?

A Chapter 13 discharge occurs after the debtor has completed their court-approved repayment plan. This discharge eliminates remaining qualifying debts that were included in the plan and not paid in full. It offers a second chance to rebuild financial stability.

Debts Commonly Discharged in Chapter 13

1. Credit Card Debt
   Unsecured credit card balances are typically dischargeable in Chapter 13. These debts are often only partially repaid under the plan, with the remaining balance wiped out after completion.
2. Medical Bills
   Outstanding medical expenses are also unsecured and can usually be discharged after the repayment plan ends.
3. Personal Loans
   Unsecured personal loans from banks, credit unions, or payday lenders generally qualify for discharge under Chapter 13.
4. Utility Bills
   Past-due amounts owed to utility companies are commonly dischargeable, though current service must usually be paid to avoid shutoffs.
5. Older Income Tax Debts
   Some federal and state income taxes may be dischargeable, provided they meet specific criteria, such as being over three years old and properly filed.
6. Lease and Contract Obligations
   Debts related to leases or contracts that have been rejected or terminated can sometimes be included in a Chapter 13 discharge.
7. Certain Divorce-Related Debts
   While alimony and child support cannot be discharged, debts to a former spouse that are not support-related (such as property settlements) may qualify in some circumstances.

Debts That Are Not Dischargeable

Certain debts cannot be discharged in Chapter 13, including:

• Student loans (except in rare cases of undue hardship)
• Recent tax debts
• Child support and alimony
• Court fines or criminal restitution
• Debts incurred through fraud or malicious acts

Why Work with a Bankruptcy Attorney in Raleigh

Understanding which debts can be discharged—and which cannot—is essential to building a workable repayment plan. At the Law Office of Calvin Craig, we guide clients through every step of the Chapter 13 process, ensuring that all applicable debts are properly addressed and that they receive the fullest relief available under North Carolina bankruptcy law.