How Credit Card Debt Fits into Chapter 13
If you opt for Chapter 13 bankruptcy, you will have questions regarding how the process works. This includes the type of debt that you can include in your repayment plan.
Many people are unsure of whether or not credit card debt is included in a Chapter 13 repayment plan.
Here is what you need to know: in order to qualify for this type of bankruptcy, you are obligated to repay all secured creditors and priority debts. Along with this, you must repay a portion of the debt owed to unsecured creditors.
Credit card debt is a type of unsecured debt. For this reason, there is a good chance that you will only repay a portion of the debt that you owe.
Note: a Chapter 13 repayment plan will require that you repay unsecured creditors, such as credit card companies, an amount equal to your nonexempt property. This is the best way to get a basic idea of how much credit card debt will be repaid through your repayment plan.
Follow the Process
Even with this knowledge, you may be confused as to what happens to your credit card debt upon filing for Chapter 13 bankruptcy. Rather than beat yourself up, contact us to discuss your current situation and the concerns that you have.
As long as you know what you are doing, as long as you are willing to follow the process, you can benefit from a Chapter 13 filing. This holds true regardless of how much credit card debt you are dealing with.
In short, credit card debt is part of a Chapter 13 repayment plan. However, it is important to remember that this unsecured debt takes a backseat to other types. Often none of the credit card debt is repaid and it is all discharged
If you are considering this type of bankruptcy, it is good to know how each type of debt will be treated. For an analysis of how Chapter 13 or other types of debt relief might work best for you, contact out firm to schedule your free, no-obligation consultation. David M. Offen has been a credit card debt lawyer in Philadelphia for over 20 years and has helped thousands of people just like you resolve their debt problems.