What Debts Are Discharged by Bankruptcy?

In Chapter 13 cases, and with a few exceptions, obligations detailed within the plan will be discharged when all payments under the plan have been made. The only debts not discharged under Chapter 13

• criminal fines and restitution
• obligations not listed on the debtor’s bankruptcy schedules
• debts for spousal maintenance, alimony, and child support
• student loans
• debts related to drunk driving convictions

These exceptions apply to individuals only; corporations are not eligible for discharges. That said, under Chapter 7 corporations are allowed an orderly liquidation directed by the trustee, and without shareholder expense. Creditors are guaranteed compensation in accordance with available resources and according to claim priority. In addition, the corporation’s previous management is assured that assets remaining after all Chapter 7 expenses have been paid will be used to pay taxes, for which they as individuals may be legally responsible.