Chapter 13

Chapter 13 Bankruptcy Repayment Plan Explained

Chapter 13 payments are aimed at providing unsecured creditors with a repayment plan. Lenders are required to pay as much as they can afford on a monthly basis for however long the plan is set out for. You can also pay your debt in full, or whichever is the lesser amount. All payments to unsecured creditors are 0% interest and there are no late charges or hidden fees. Unsecured creditors should be paid at least what they would have received if you had filed a Chapter 7. An experienced bankruptcy attorney can help you determine the payment amount and the length of time that you will be required to pay over. You can propose a payment plan or let your attorney help you with the nitty-gritty.

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Chapter 13 

Bankruptcy Repayment for Chapter 13 Discharge and A Repayment Plan

Typically, with this type of bankruptcy repayment, you will be paying back all of your debts, including unsecured nonpriority claims, in a shorter period. Your repayment plan will have to be at least three years long, but it may not exceed five years. Whether you propose three years or five years will depend on whether your average income for six months preceding your Chapter 13 discharge is above or below your median income. If your income is lower than the media, your plan will last anywhere between 36 – 60 months. It’s important to note that a 60-month plan can reduce your monthly repayments by stretching them over a longer period of time.

You can figure out your minimum monthly payments by:

  • Priority debts for your bankruptcy payment
  • Mortgage arrears as part of your repayment plan
  • Car loans as part of Chapter 13 discharge
  • Various secured debts you want to pay off through your plan
  • Administrative fees and interest charges
  • Regular monthly payments on loans
  • Disposable income can render the payment plan higher
  • Nonexempt property can make your payment plan higher
  • The amount of unsecured debt accrued
  • Various options if you are unable to make a payment plan

More About the Chapter 13 Repayment Plan

Just how much will you have to pay on your Chapter 13 repayment plan? Some creditors may receive 100% of what you owe them, and others may be given a far smaller percentage or even nothing at all. Typically, this type of bankruptcy payment provides that administrators, including filing fees, trustee’s commission, and attorney’s fees will be paid at 100%. Priority debt discharge will be paid at 100%, including child support, tax debts, wages, salaries, and contributions owed to an employee fund. Mortgage defaults and various secured debt defaults will be settled at 100%, whereas unsecured debts can be paid anywhere from 0 – 100%.

Talk to an Attorney About Chapter 13 Bankruptcy Payment

Our attorneys will help you choose the best plan for your situation.

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Phone: 610-489-3041
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