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Chapter 13 Plan

Posted on in Bankruptcy

Chapter 13 is informally referred to as the “Wage Earners Plan.” This is because most people who file under Chapter 13 have a regular income that will allow them to repay their debts over a three to five year span. Before the debtor can start repayments to creditors, the court must sign off on the repayment plan.

The first step is to file paperwork with the court listing your monthly income, debts, property and expenses so the court can get a full picture of your financial situation. You are required to file your tax return, and prove to the court that you've filed your tax return for the previous four years.

Filing for Chapter 13 bankruptcy also requires that you complete a credit counseling course with a vendor approved by the court. Once you've done these things, you are required to submit a plan to repay your debts to your creditors. The payments will be paid monthly to a court appointed trustee, and you are required to make each payment on time.

Some of your debts must be repaid 100%, while others may be repaid less or not at all. Alimony and child support, most tax debts, attorney's fees and court costs, and wages due to your employees must be repaid in full. Mortgages and secured debts must be repaid if you plan to keep the property. Your unsecured debts may be paid 100% or less or not at all. This depends on your income and other specific facts about your case. This is one area where you need the help of an experienced bankruptcy attorney to file your case with the court.

The Chapter 13 plan is the method for repaying debts owed to your creditors. In order to get the best representation before the court, contact one of our bankruptcy lawyers today for a consultation.

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