The Chapter 13 Bankruptcy Repayment Plan can be quite confusing when you are unsure of the details. Here we highlight some of the major questions and topics regarding the Chapter 13 Repayment Plan
What is the Chapter 13 Bankruptcy Repayment Plan?
Chapter 13 Bankruptcy or wage earners’ plan allows individuals with a regular income to create a 3 to 5 year bankruptcy repayment plan to repay all or part of their debts. The laws governing Chapter 13 bankruptcy can be found in Chapter 13 of the bankruptcy code also know as Title 11 of the United States code.
Chapter 13 Bankruptcy is available to all U.S. citizens; however, certain eligibility requirements must be met. A debtor’s outstanding unsecured debts must be less than $307,675 and secured debts must be less than $922,975. Credit counseling must also be completed within 180 days prior to filing Chapter 13 Bankruptcy.
How does the Chapter 13 Bankruptcy Plan work?
Payments are made directly to an assigned trustee who administers the case either through automatic payroll deductions, money orders, or checks. The trustee is responsible for paying the creditors until the plan requirements are complete. Disbursements must be made "as soon as is practicable" by the trustee after the court confirms the debtor’s plan.
The goal of the Chapter 13 bankruptcy plan is to allow the debtor to satisfy their debt obligations owed to most if not all of their creditors. A creditor has the right to provide input in regard to the development of the repayment plan.
-The bankruptcy petition is an official form filed by the person who wants to begin the bankruptcy process.
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