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.
If you are considering this type of bankruptcy, it is good to know how each type of debt will be treated.