Rules You Need To Know When Making Your Payments In Chapter 13 Bankruptcy

Rules You Need To Know When Making Your Payments In Chapter 13 Bankruptcy

When filing Chapter 13 bankruptcy, the debtor agrees to repay their creditors over the course of 3 to 5 years.  The amount that the debtor pays will include both their secured and unsecured debts; however, they may only be required to pay part of their unsecured debts with the balance being discharged at the end of their bankruptcy repayment period.  Below are a few rules Chapter 13 bankruptcy debtors should know about making payments into their plan:

  1. Each Chapter 13 bankruptcy debtor is required to create a repayment plan for their creditors.  This payment plan must be approved by the Chapter 13 bankruptcy trustee and must not favor one creditor unfairly over another.
  2. While one creditor may not be favored by the debtor over others, the bankruptcy court does prioritize debts giving some more opportunity to get paid than others.  For example, a child support creditor would receive a higher priority than a credit card debt and federal tax debt would get paid before a parking ticket.
  3. The bankruptcy trustee will receive payments from the debtor and distribute the payments to creditors based on their priority level.  Debtors in Chapter 13 bankruptcy will agree to pay a certain amount of money every month by a certain date.
  4. Chapter 13 bankruptcy debtors must make their monthly payments every month and in a timely manner.  If the bankruptcy debtor fails to make their payments on time or misses a payment, their bankruptcy case could be dismissed.
  5. The first payment of a debtor’s Chapter 13 bankruptcy must be made no later than 30 days after the debtor has filed their repayment plan.
By | 2017-12-13T02:23:23+00:00 August 6th, 2010|Chapter 13 Bankruptcy|Comments Off on Rules You Need To Know When Making Your Payments In Chapter 13 Bankruptcy