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How Much Debt Is Required to Be Repaid in Chapter 13 Bankruptcy?

Posted By Allmand Law Firm, PLLC || 19-Dec-2013

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Debtors considering Chapter 13 bankruptcy may want to know how much they are required to pay during the plan. Understanding what you will be required to pay will depend on several factors. Your monthly income, type of debt, and ability to make payments will have an effect on what you will pay. There are certain debts that may be required to be paid, with others being discharged at the end of the plan if they qualify. The bankruptcy court sets guidelines for debtors to follow when determining repayment plans for debtors.

Debt in the plan gets divided into categories including priority debt, secured debt, and unsecured debt.

Priority debts are required to be paid in full through the repayment plan and may include debts such as child support, spousal support and income taxes. Any payments you fell behind on (also known as arrears) would be paid as required.

Secured debts will also be required to be paid, but as with priority debts, you will make payments toward obligations in default or anything with property you want to keep. If you are behind on a loan, such as your mortgage or vehicle and want to keep the property, you can catch up on payments to get the loan current.

Unsecured debts may or may not be paid depending on what you will be required to pay toward priority and secured debts. You may pay some or nothing toward unsecured obligations and at the end of the repayment plan, they may get discharged.

Reference: http://www.nolo.com/legal-encyclopedia/chapter-13-bankruptcy-faq-32408-2.html

http://www.nolo.com/legal-encyclopedia/chapter-13-bankruptcy-plan-obligations-29601.html

Categories: Chapter 13 Bankruptcy
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