Brunswick, GA

Mon - Fri 9:00AM - 5:00PM

Questions You May Have About the Chapter 13 Repayment Plan

Questions You May Have About the Chapter 13 Repayment Plan

When you choose to file for Chapter 13 bankruptcy, you will repay your debts through a repayment plan. Before you file, it's important to find out how this repayment plan works. That way, you can make an informed decision on how to proceed. Here are some of the top questions you might have about Chapter 13 repayment plans.

Who Creates the Plan?
You will need to meet with a bankruptcy lawyer to find out details of what your repayment plan would look like if you filed for Chapter 13. Your lawyer will be the one creating the plan, but the lawyer must send it to the bankruptcy trustee for approval before it becomes a legal plan.

When the bankruptcy trustee receives it, they will review it carefully to determine whether it follows legal rules and guidelines. The trustee will also review it for accuracy. If the trustee feels that it is a good plan, then they will approve it. After approving it, you will be one step closer to financial freedom.

How Is It Figured?
Figuring out a repayment plan requires a lot of work, analyzation, and calculations, and your lawyer will handle all of this. The lawyer will need several key things from you to complete the figures for the repayment plan. First of all, the lawyer will need to see your income. Secondly, the lawyer will want to see a list of your debts, including past-due balances on any of them.

Your income matters because it determines how long the plan lasts and if you qualify for Chapter 13. To qualify, you must have a steady income, and it must be enough to repay your debts over the course of several years.

Your debts matter because these are what you are paying off in the plan, and your lawyer will categorize the debts based on what they are. Certain debts are placed in the priority category and other debts in the non-priority category.

Priority debts include mortgage payments, arrears on mortgages, child support, alimony, and any other debt that cannot be discharged in bankruptcy. With these debts, you will have to repay them in full through the plan.

Debts that fall into the non-priority category include medical bills and credit cards, and you may not have to repay these in full through your plan. With this information, your lawyer will come up with a plan for your individual situation and will present it to the trustee.

How Long Does the Repayment Plan Last?
The plan will last three or five years, and this timeframe will depend on your income. After the lawyer calculates your income, they will compare it to the state's average income. If your income is less than the state's average, you can have a three-year plan. If it is more, you will have a five-year plan.

How Long Does the Repayment Plan Last?
The plan will last three or five years, and this timeframe will depend on your income. After the lawyer calculates your income, they will compare it to the state's average income. If your income is less than the state's average, you can have a three-year plan. If it is more, you will have a five-year plan.

Will You Have to Repay Every Debt You Have?
The good news about Chapter 13 is that you probably will not have to repay all your debts in full. The other good news is that this plan will help prevent you from losing assets you have, such as your house.

When you make your last payment for the three or five-year period, you will be up-to-date on every payment you owe. If you still owe money on non-priority debts, the court might simply forgive them instead of making you repay them.

If you would like to discuss these questions and others with an attorney, contact William S. Orange III. We can help you stop creditor harassment, a foreclosure, and wage garnishments. Call us today to schedule a consultation with a qualified bankruptcy attorney.

Leave a Comment

You must be logged in to post a comment.