A Chapter 13 bankruptcy plan can help you get your finances back in order.
As a court-approved repayment plan that restructures debts, you may be
able to make reduced payments on obligations based on your income ability.
Yet, there are certain debts you are required to pay as part of the agreement,
including secured debts and priority debts.
Chapter 13 is often filed by debtors looking to retain property or a secured
debt. This is debt that has collateral attached such as a vehicle or house.
Debtors use this option to make missed payments or catch up to make the
Priority debts are those you must pay that do not qualify for discharge
or elimination. Domestic support (such as child or spousal support) and
income taxes are common priority debts you are expected to pay. If these
debts not paid while your case is active it could lead to dismissal. According
to Congress, priority debts have a higher level of importance; making
them a requirement in
Chapter 13 cases to be paid.
Chapter 13 bankruptcy cases may last from 3 to 5 years. During the plan
you may be required to pay 100 percent of the outstanding balance for
priority debts. Secured debts may require you to pay past and current
balances in order for you to retain associated property. Income tax debt
for back taxes may be required to be paid in full under the repayment plan.