Does chapter 13 wipe credit card and unsecured debts?

Chapter 13 on credit cards and unsecured debts are wiped out depending on the types of debts you have. Chapter 13 requires you to pay creditors the back payments you owe them through a repayment plan. A repayment plan includes your debts and the monthly amount you’re required to pay each month. The monthly payments are sent to a bankruptcy trustee who distributes funds to creditors. However, the trustee pays debts according to their type. Thus, priority debts are paid first and in full. Priority debts are obligations such as child support, alimony and unpaid taxes. The bankruptcy trustee will pay secured debts next.  These debts are generally ones with collateral such as a home or car. If there is any money left after your priority and secured debts are paid, then your unsecured debts are paid. Of course, these debts include your credit cards. However, if there is no money left in your repayment plan, then the U.S. Bankruptcy Court will successfully discharge or wipe out those remaining unsecured debts.

During your repayment plan you also have to make payments directly to your creditors. This means that you must keep your future payments current.

Bankruptcy is complex with specific rules and codes. Therefore, you should speak with a bankruptcy lawyer to learn if you’re eligible for chapter 13 and what debts you should include. The lawyer will file the required paperwork.