Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
When you file a Chapter 13 Bankruptcy, you have to pay all disposable income to the trustee for 3-5 years. (The length of time depends on your gross monthly income.) The disposable income is one's take-home pay minus allowable expenses.
At the end of the 3-5 years, any balance owed to the unsecured creditors is discharged.
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When you are in a Bankruptcy - Chapter 7 or 13 - the trustee does not settle with creditors. The creditors have no choice, and have to accept what the trustee pays them, if they get anything at all. The amount that they get depends on how much money you make, and how much money you need to live on.
In a Chapter 7 debts are discharged right away, and in a Chapter 13 debts are discharged after 3-5 years.
Creditors are not allowed to negotiate with debtors while the debtor is in the midst of a Bankruptcy.