Repayment Plan in Chapter 13 Bankruptcy
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Filed under: Chapter 13
When you file Chapter 13 bankruptcy, you will submit a plan to the courts outlining how you intend to make the payments to catch up on your debt. Certain debts will need to be paid in full during your case.
- Priority debts are debts that are unsecured like back child support and taxes
- Secured debt such as mortgage or vehicles if you plan to keep them
You will be required to pay all of your priority and secured debt during your Chapter 13 bankruptcy. Your nonpriority unsecured debt such as credit cards and medical debt will vary in the amount you will pay back. Using your leftover income after you pay your living expenses and priority debt will determine how much of your unsecured debt you will need to pay.
How Long to Pay
When determining how long you will make the payments, you compare your income to the state you live in median income. If you make more than your state’s median, you will be required to pay for five years, and if you make less, you can be on a three-year repayment plan
Other determinations for how long you will pay on your debt is to calculate if you have income left over after paying your living expenses. Even though you may qualify for a three-year plan, you may need the five-year plan if it will take that long for you to catch up on your debt.
If you have more questions about what you will have to pay in bankruptcy, contact a Dallas bankruptcy attorney.
