This means that a creditor who has a claim that might not be discharged in a Chapter 7 may very well have the claim reduced to a small percentage in a Chapter 13, with the balance discharged. Chapter 11 is typically used for businesses to reorganize. However, individuals can and do file Chapter 11, so a settlement with a doctor or business executive may not be as iron clad as one might think. The super discharge of Chapter 13 is, however, missing in a Chapter 11 proceeding. Many people have a tendency to think all debts involved with a divorce are nondischargeable, but this is not the case.
Claims arising from the support of a dependent or former spouse are non-dischargeable.
1 As with many areas of the law, what should be obvious is not so due to facts that cloud the issue. However, due to various competing forces, it is not so easy to make other determinations. For instance, an ex-wife may want to get money from her former spouse, but also to continue to receive it if she remarries. Even if remarriage is not a concern, the ex-wife may not want to pay taxes on it, as would be required if it were traditional alimony. Obligations may be nondischargeable as money owed for support even if it is not paid to the spouse but rather someone else who assisted the spouse.