Dealing with financial difficulties can be an overwhelming and stressful time. When determining whether filing for bankruptcy is right for you, you may wonder what happens to the debt in a chapter 13 repayment plan. Read on to find out.
Where the Debt Goes in a Chapter 13 Bankruptcy
Under chapter 13 bankruptcy, you are able to make a plan to repay some or all of your debts over a period of three to five years, depending on what you can afford. This means you can deal with the debt you are unable to address in a chapter 7 bankruptcy, and reorganize it into one payment that will be more manageable and allow you to dig yourself out of debt.
It’s important to note that the majority of debtors tend to pay back a portion of their debts to unsecured, nonpriority creditors through the bankruptcy plan, and the rest of the debts will be discharged when the bankruptcy comes to a conclusion.
Some of your nonpriority, unsecured debts will not be discharged upon the completion of your chapter 13 plan, however, they are stalled from collection during the plan. These debts include:
- Child support,
- Criminal penalties,
- Drunk driving debts,
- Student loans (although there may be some exceptions), and
- Fraudulent debts.
We’re Here to Help You Now
If you are thinking about filing for chapter 13 bankruptcy, we can help you. Our attorneys are highly skilled in bankruptcy law and have helped many others just like you around the country. Let our team see what we can do to help with your financial goals as well.