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Will A Chapter 13 Bankruptcy Clear My Credit Card Debt?

In a Chapter 13 bankruptcy, your debts are restructured and you commit to a payment plan that will discharge your debt in three to five years.

This reorganization of debt follows certain rules that prioritize categories of debt. Your repayment plan will specify the type of debt you’re reorganizing, which include:

Secured debt, which is backed by an asset. A car loan is a secured debt, and in general, you’ll be expected to pay the full amount of secured debt in your repayment plan if you want to keep the asset.

Priority unsecured debt is not backed by collateral, but is given priority under the law. This can include non-dischargeable debt like spousal or child support, and some instances of income tax debt.

Which brings us to plain old, “general unsecured debt,” which is what credit cards are. These are the lowest priority debts under law, and they usually don’t have to be paid in full in Chapter 13 bankruptcy.

Let the bankruptcy attorneys at Zelenitz, Shapiro & D’Agostino help you understand which debts have priority, and how you can restructure your debt to finally be free.

Call us today at 718-599-1111 for a free consultation.