What debts are eligible to be discharged in Chapter 11?

In California, Chapter 11 bankruptcy law allows debtors to reorganize their finances and discharge certain debts. Generally, Chapter 11 bankruptcy allows debtors to keep their property while they attempt to pay off their debts. Under Chapter 11, eligible debts may include, but are not limited to, credit card debt, medical bills, personal loans, and any other unsecured debt. Additionally, if a debtor is behind on mortgage payments, they may be able to use Chapter 11 to become current on their mortgage and ultimately keep their property. Chapter 11 bankruptcy does not allow for the discharge of some debts, including spousal and child support, certain taxes, and certain student loans, among other secured debts. Additionally, certain debts that have been acquired within a certain period of time prior to filing for bankruptcy will not be eligible for discharge, such as certain government debts. Although Chapter 11 bankruptcy generally allows debtors to keep their property and is more forgiving than other types of bankruptcy, debtors must still be aware of which debts they can and cannot discharge. Debtors should consult an experienced bankruptcy attorney before filing to ensure they are taking the right steps to protect their finances.

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