What happens to student loans/state taxes if I convert my Chapter 13 into a Chapter 7?

UPDATED: Mar 12, 2012

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What happens to student loans/state taxes if I convert my Chapter 13 into a Chapter 7?

I am currently in a Chapter 13 bankruptcy but cannot afford the payments. I was recently divorced again and now have over $1,300 a month in child support payments. I have no assets and little money. I am considering converting my 13 in to a 7 but I have student loans and state taxes (from a now defunct business) included in the 13. What would happen with those if I qualify for 7? I know they are not eligible for Chapter 7, so how would I repay them? Can I even convert it if I have those types of debts?

Asked on March 12, 2012 under Bankruptcy Law, Ohio


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The best person to answer your questions in great detail would be your bankruptcy attorney. However, typically when one has a bankruptcy as a chapter 7 filed, approved and obtains a discharge under it, most debts (not child support and some times not owed taxes and certain loans) are eliminated. Possibly your student loans and state taxes owed might not be able to be discharged.

If they are not, you might be able to enter into some approved monthly installment plan that you can afford approved by the bankruptcy court. It sounds like you need to have a sit down conference with your bankruptcy attorney.

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