Bankruptcy Basics: The Chapter 13 Repayment Plan

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The repayment plan in a Chapter 13 bankruptcy filing is essential to both creditor and debtor.  The debtor must present a plan in good faith; and, the creditor will be paid in accordance with the plan’s terms. The debtor submits the repayment plan as part of the bankruptcy petition filing.Basic elements of a Chapter 13 repayment plan include:

Basic elements of a Chapter 13 repayment plan include:

  1. The duration of the plan (generally three to five years)
  2. Value (total dollar amount) of the debtor’s assets and property
  3. Proposed payment amounts for the following types of debts:
  • Priority Debts — alimony, child support, employee wages, some types of taxes. These must be paid in full by the end of the bankruptcy period.
  • Secured Debts — mortgages, vehicle loans. These debts may be addressed outside the bankruptcy plan via reaffirmation agreements, or even reduced by means of a negotiated “cramdown.”
  • Non-Priority Unsecured Debts — credit card debt, medical bills, personal loans. After priority and secured debts are given attention, the unsecured creditors in this category often only receive a percentage of what is owed them.

Before the case can proceed to the point at which any creditors will begin receiving payment, the repayment plan must be confirmed by the bankruptcy court.

If you would like more information about repayment plans or any other elements of Chapter 13 Bankruptcy, creditors’ rights, or if you need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide clients with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.

 

 

 

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