Reducing Credit Card Bills & Other Unsecured Debt

Summary:  Unsecured debt such as credit cards, medical bills, and lawyer bills can be eliminated entirely in a Chapter 7 filing or sharply reduced in a Chapter 13 plan. They can also be settled for 40% or less. There are some limited exceptions, such as child support, recent credit card purchases for luxury items or cash advances, court fines, etc.

Settlement of Unsecured Bills For 40% or Less

Unsecured bills in Colorado such as credit card bills, medical bills,  and other revolving account bills can usually be settled for 40% or less.

"Unsecured" means that there is no lien on any property.  "Secured" bills are those which are a lien on cars or real estate.

Bankruptcy Can Be The Best Option is Some Cases, But Not All

Credit card debt, judgments, lawyer bills, medical bills, and other unsecured debt can almost always be fully wiped out (discharged) in a Chapter 7 filing. And most of it may be able to be discharged in a Chapter 13 plan, depending on your ability to pay.

Exceptions include a few items such as child support, maintenance (alimony), debts incurred in a divorce case (Domestic Support Obligation), some taxes less than 3 years old, most student loans, and recent credit card charges for luxury items and cash advances. Also some less obvious debts such as court fines, drunk driving injury, and debt on account of fraud or theft cannot be eliminated.