Some Chapter 13 Specifics

: Chris Lee Law Firm

  Filed under: Chapter 13

chapter 13When it comes to filing for bankruptcy, there are many aspects to the process that must be considered. Filing isn’t always as easy as completing the paperwork and ┬áturning it over to the court. Each step of the process has numerous requirements that can affect the outcome of the case. Before entering into the bankruptcy process, consider a few of the important specifics about filing for Chapter 13.


In general, qualifying for Chapter 13 is easier than qualifying for Chapter 7, because a filer must meet strict income requirements in order to qualify for Chapter 7. However, there are some restrictions even in qualifying for Chapter 13. First, the debtor must be an individual with regular income who is seeking debt reorganization. Unincorporated enterprises and sole proprietorships may also be eligible for Chapter 13. Also, unsecured debts must not exceed $360,475 and secured debts must not exceed $1,081,400.

Repayment Plan

Many people have questions over what goes into the Chapter 13 repayment plan. First, the debtor provides a list of creditors, which get prioritized by the amount and interest they are owed. Second, the debtor develops a proposed payout plan for the creditors. Third, a comparative analysis of funds that could be available to creditors through liquidation under a Chapter 7 scenario. Fourth, the debtors employment income is detailed, along with their ability to maintain the proposed plan. Last, the statutory debt limits are established for creditor claims, setting boundaries as to what is collectable until a certain date.


Once the repayment plan is developed and approved by the court, the payment schedule is initiated. Priority claims start the payment process and include items such as taxes and domestic support payments. Secured claims are next in line for payment and include items such as mortgages, car loans or other secured debt loans. Unsecured claims are the last to receive payment and include items such as credit cards, medical bills or other unsecured debts.



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