Yes, you can get rid of some of your unsecured debt when you file for Chapter 13 bankruptcy, but not all of it. Chapter 13 bankruptcy is a debt reorganization plan that allows you to consolidate and repay some or all of your debts over a period of three to five years.
During the repayment period, you will make monthly payments to the bankruptcy trustee, who will distribute the funds to your creditors according to your repayment plan. Your repayment plan will be based on your disposable income, which is your income after you have paid for your necessary living expenses, such as rent, utilities, food, and transportation.
Your unsecured debts will be categorized into priority and non-priority debts. Priority debts, such as taxes and certain types of unpaid fines, must be paid in full during the repayment period. Non-priority unsecured debts, such as credit card debt and medical bills, may be paid in full, partially or not at all, depending on the amount of disposable income you have available.
At the end of the repayment period, any eligible non-priority unsecured debts that remain unpaid will be discharged, which means you will no longer be legally responsible for paying them. However, some types of unsecured debts, such as student loans and certain tax debts, cannot be discharged through bankruptcy.
It is important to note that Chapter 13 bankruptcy may have some advantages over Chapter 7 bankruptcy for those with significant assets or a regular income. However, it can be a complex process, and it is highly recommended that you consult with a qualified bankruptcy attorney to explore your options and determine the best course of action for your situation.
It is important to work with a qualified bankruptcy attorney who can help you. If you are interested in filing bankruptcy please contact Hishaw Law LLC at 1.307.228.0407 if your located within the state of Wyoming or 1.704.218.9883 if you live in the Charlotte, North Carolina area or email us at jhishaw@hishawlaw.com.
