What Debts Are Discharged in Chapter 13 Bankruptcy?

What Is a Chapter 13 Discharge?

A Chapter 13 discharge is a court order that permanently prohibits creditors from taking any collection action on listed debts after the debtor successfully completes all required payments under a confirmed repayment plan. This discharge is the ultimate goal of a Chapter 13 bankruptcy—it frees the debtor from personal liability for most debts, providing a fresh financial start. Unlike Chapter 7, which requires liquidation of non-exempt assets, Chapter 13 allows individuals to keep their property while catching up on overdue payments (such as mortgage arrearages or priority tax debts) through a structured plan lasting three to five years. The discharge is not automatic; the debtor must complete the plan, attend a financial management course, and comply with all court orders. If the court finds misconduct, fraud, or failure to make plan payments, it may deny the discharge entirely.

The discharge only applies to debts that arose before the bankruptcy filing. It does not cover post-petition debts—obligations incurred after the case begins. For example, if you open a new credit card after filing, that debt is not dischargeable in the same case. Understanding the precise scope of the discharge helps debtors plan strategically and avoid surprises when the case concludes.

Which Debts Are Discharged in Chapter 13?

Chapter 13 is notably more forgiving than Chapter 7 when it comes to discharging certain categories of debt. The Bankruptcy Code allows debtors to eliminate many unsecured obligations, as well as some debts that are typically non-dischargeable in a straight Chapter 7 liquidation. This broader discharge is sometimes called a “super discharge” because it covers debts like willful and malicious injury claims and certain divorce property settlements.

Common Dischargeable Debts

The following debts are regularly discharged in Chapter 13 upon completion of the repayment plan:

Credit card debt: Most unsecured credit card balances, including accrued late fees and interest, are discharged. This includes store cards and co-branded cards.
Medical bills: Hospital stays, surgeries, emergency room visits, and other medical expenses are fully dischargeable, regardless of amount.
Personal loans and payday loans: Unsecured loans from banks, credit unions, friends, family, or payday lenders are discharged. However, if the loan was used for a non-dischargeable purpose, the debt may survive (e.g., loans used to pay taxes).
Past-due utility bills: Outstanding charges for electricity, water, gas, and phone service can be included in the plan and discharged. However, you must stay current on post-petition utility payments.
Certain income tax debts: Income taxes that are more than three years old, assessed more than 240 days before filing, with returns filed at least two years earlier, may be discharged. Chapter 13 also allows discharge of priority tax debts if the debtor pays them in full through the plan.
Divorce property settlements (non-support): Debts owed to a former spouse as part of property division—but not spousal or child support—can be discharged in Chapter 13. In Chapter 7, these debts survive.
Debts from willful and malicious injury: Chapter 13 can discharge debts arising from intentional harm (e.g., assault, battery) if the debtor completes the plan. Chapter 7 generally cannot discharge such debts.
Debts from theft or fraud (in some cases): If the debtor was not found liable in a prior court proceeding, Chapter 13 may discharge fraud-related debts. However, if the debt was reduced to a judgment based on fraud, it is non-dischargeable unless the debtor obtains a successful adversary proceeding.
Debts discharged in a prior bankruptcy (if not re-affirmed): Any debt that was previously discharged but not re-affirmed is already legally unenforceable, but Chapter 13 can reinforce that status.

Debts That Are Not Discharged in Chapter 13

Despite the broad discharge, certain debts survive Chapter 13 regardless of plan completion. These are generally considered too important to public policy or too closely tied to misconduct to be wiped out.

Student loans: Federal and private student loans are nearly impossible to discharge unless the debtor proves “undue hardship” through a separate adversary proceeding. This is a difficult legal standard requiring a showing that the debtor cannot maintain a minimal standard of living, the hardship will persist for a significant portion of the repayment period, and the debtor has made good-faith efforts to repay.
Child support and alimony: Domestic support obligations are never dischargeable. They must be paid in full outside the plan, and the debtor must remain current throughout the case.
Most tax debts: Nondischargeable taxes include: income taxes less than three years old; property taxes; trust fund taxes (e.g., payroll taxes withheld from employees); tax debts where the debtor filed a fraudulent return or evaded taxes; and taxes for which the debtor failed to file a return. Some tax debts may be paid through the plan but are not discharged unless paid in full.
Debts from drunk driving accidents: Liability for death or personal injury caused by driving under the influence of alcohol or drugs is non-dischargeable in both Chapter 7 and Chapter 13.
Debts from fraud or embezzlement: If a creditor successfully objects and proves the debt was obtained by fraud, embezzlement, larceny, or false pretenses, the court will not discharge it. This includes debts for which a judgment has been entered.
Fines and penalties owed to government agencies: Traffic tickets, court fines, restitution in criminal cases, and penalties for violating the law survive Chapter 13.
Debts not listed in the bankruptcy petition: If a creditor is not notified because the debtor omitted the debt from schedules, the discharge does not apply. The debtor must list all creditors, even if the debt is disputed or contingent.
Home mortgage and car loans (unless stripped): The underlying debt secured by real estate or vehicles generally survives bankruptcy, but the debtor can catch up on arrearages through the plan. Second mortgages may be stripped if the property is underwater. Car loans can be “crammed down” to market value under certain conditions.

How Chapter 13 Discharge Differs from Chapter 7

The scope of the discharge is one of the most important differences between Chapter 13 and Chapter 7. In Chapter 7, the discharge is granted relatively quickly—usually within four months—but it is narrower. Debts from willful and malicious injury, certain tax debts, and divorce property settlements are not dischargeable. Chapter 13, by contrast, offers what some call a “super discharge” because it can eliminate debts that Chapter 7 cannot, provided the debtor completes the entire repayment plan.

For example:

A debtor who was sued for a fistfight (willful and malicious injury) can discharge that debt in Chapter 13 but not in Chapter 7.
A debtor who owes property to a former spouse as part of a divorce decree can discharge that obligation in Chapter 13, but it would survive Chapter 7.
Certain income tax debts that are non-dischargeable in Chapter 7 may become dischargeable if the debtor pays the priority portion through the Chapter 13 plan.

However, Chapter 13 requires a longer commitment, and if the debtor fails to complete the plan, no discharge is granted. In Chapter 7, the discharge is nearly automatic unless there is misconduct. Chapter 13 also allows debtors to deal with secured debts in ways that Chapter 7 does not, such as lien stripping and cramdowns.

Special Tools: Lien Stripping and Cramdowns

Beyond the discharge, Chapter 13 offers unique opportunities to reduce secured debts. These tools can effectively eliminate portions of certain debts even though the secured lien survives.

Lien Stripping

If a property’s value has fallen below the amount owed on the first mortgage, a second or third mortgage may be “stripped off.” This means the junior lien is treated as unsecured and discharged at the end of the plan. The lien is removed from the property title, and the debtor no longer owes that debt. For lien stripping to work, the property must be the debtor’s primary residence (or certain other real estate). The first mortgage must also be undersecured. Lien stripping is not available in Chapter 7.

Cramdown of Vehicle Loans

For auto loans that were taken out more than 910 days before filing (about 2.5 years), Chapter 13 allows the debtor to reduce the principal to the car’s current market value and pay that amount at a lower interest rate through the plan. The remaining unpaid balance is treated as unsecured debt and may be partially discharged. Loans secured by vehicles purchased within 910 days cannot be crammed down; they must be paid in full. Similarly, loans for personal property other than vehicles (e.g., boats) may be crammed down if the debt was incurred more than one year before filing.

Eligibility for a Chapter 13 Discharge

Not everyone qualifies for Chapter 13. The Bankruptcy Code sets strict limits on debt amounts. As of 2024, the debtor must have less than $2,750,000 in secured debts and less than $419,275 in unsecured debts (these amounts are adjusted periodically). Additionally, the debtor must:

Receive credit counseling from an approved agency within 180 days before filing.
Have a regular source of income to make plan payments.
File all required tax returns for the four years before the case.
Complete a financial management course before the discharge is entered.

If the court finds that the debtor acted in bad faith, failed to pay domestic support obligations, or attempted to defraud creditors, it may deny the discharge entirely. In some cases, the court may grant a partial discharge, leaving certain debts unpaid.

Steps to Ensure Your Debts Are Discharged

List all debts accurately in your bankruptcy schedules. Missing even one creditor can leave that debt outside the discharge. Double-check credit reports and personal records.
Make all plan payments on time. Missed or late payments can lead to dismissal of the case and no discharge. The plan must be completed as confirmed.
Keep current on post-petition debts such as ongoing mortgage payments, car loans, and domestic support obligations. The Chapter 13 plan does not cover future payments.
Attend the required financial management course and file the certificate with the court. Failure to do so will delay or deny the discharge.
Object to improper claims if a creditor files an inflated proof of claim. The trustee will pay claims as filed, so errors can reduce the amount of debt discharged.
Consult with an experienced bankruptcy attorney throughout the process to anticipate creditor objections and maximize your fresh start.

Even after discharge, certain steps remain important. For example, you should monitor your credit report to ensure discharged debts are reported as “zero balance” or “discharged in bankruptcy.” If a creditor later tries to collect, you can show the discharge order and report them to the court.

What Happens After Discharge?

After the court enters the discharge order, most collection activity must cease. Creditors cannot call, sue, garnish wages, or take other actions to collect discharged debts. However, the discharge does not extinguish a lien on property unless the lien was stripped or avoided. For example, a mortgage remains on the home; if the debtor fails to make future payments, the lender can foreclose. The discharge only removes personal liability, not the secured creditor’s right to repossess collateral.

Debtors should also be aware that a Chapter 13 discharge typically remains on credit reports for seven years from the filing date. Rebuilding credit after discharge involves paying all post-petition bills on time, using secured credit cards, and budgeting carefully. Many debtors find their credit scores improve within two to three years after discharge.

Common Misconceptions About Chapter 13 Discharge

Myth: Chapter 13 discharges everything if you complete the plan. Reality: Certain debts like student loans, child support, and recent taxes survive regardless of plan completion.

Myth: You can include any debt in the plan and it will be discharged. Reality: Some debts must be paid in full through the plan (e.g., priority taxes) to receive a discharge. Non-dischargeable debts cannot be wiped out even if they are included.

Myth: The discharge eliminates all obligation to secured creditors. Reality: Secured debts usually require continued payment to keep the collateral. Lien stripping and cramdowns are specific exceptions.

Myth: Filing Chapter 13 means you will automatically get a discharge. Reality: The discharge is conditional on completing the plan and meeting all requirements. Many cases are dismissed before discharge due to non-payment.

Getting Professional Guidance

Chapter 13 bankruptcy is a powerful tool, but its rules are complex. Whether a specific debt is dischargeable can depend on contract terms, state law, and the circumstances of the debt. A qualified bankruptcy attorney can review your situation, help you structure your plan to maximize the discharge, and represent you if creditors object. Many offer free initial consultations, and legal aid resources are available for low-income filers.

For more authoritative information on bankruptcy law, visit the U.S. Courts’ Chapter 13 page, the Federal Trade Commission’s debt relief guidance, or the NerdWallet explainer on Chapter 13 discharge. For detailed legal analysis, see the Cornell Legal Information Institute’s section on Chapter 13 discharge. Always verify current debt limits and requirements with a legal professional, as laws and amounts change periodically.