DiTocco Law Group, PLLC
Broward County
954-566-9000
Palm Beach County
561-487-0200
Miami-Dade County
305-444-8660

Basics of the Chapter 13 bankruptcy repayment plan

For people who are in financial duress but still hold a steady source of income, Chapter 13 bankruptcy is often the best form of debt relief. In a Chapter 13 bankruptcy filing, all the debts are combined, and the debtor makes regular payments to the bankruptcy case trustee to clear all debts. This method is known as the repayment plan and covers repayment of priority, secured and unsecured debts.

As many people in South Florida may know, a repayment plan needs to be submitted either at the time of filing the Chapter 13 bankruptcy petition or within a maximum of 15 days after filing the petition. This plan contains details of the fortnightly or monthly payments that the debtor would make to the trustee who would, in turn, distribute the money among the creditors per the terms of the repayment plan.

Priority debts, as the name suggests, get priority among the three types of debts mentioned earlier. These debts include most taxes and the cost of the bankruptcy procedure and these are paid in full. However, if a bankruptcy filer can prove that all of his disposable income is being used for domestic support obligations, the priority creditors may agree to a different set of terms for the repayment.

In the case of secured debts, the repayment plan must have provisions for paying the secured creditor that sum of money, which is equal to the value of the collateral that was pledged at the time of borrowing, if that debtor wishes to retain the collateral. However, under certain circumstances, a Chapter 13 bankruptcy filer may have to repay the entire loan amount and not just the value of the collateral.

In the case of unsecured debts, a debtor is not required to make regular payments as long as it is evident that all disposable income is being paid to those unsecured creditors over an applicable commitment period. In addition, the laws ensure that the unsecured creditors receive at least that sum of money that they would have received if the debtor filed for liquidation under Chapter 7 of the Bankruptcy Code.

No Comments

Leave a comment
Comment Information

How Can We Help You?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

email us for a response

Main Office

6750 North Andrews Avenue
Suite 200
Ft. Lauderdale, FL 33309

Phone: 954-566-9000
Fort Lauderdale Law Office Map & Info

3350 SW 148th Avenue
Suite 110
Miramar, FL 33027

Phone: 954-566-9000
Miramar, FL Office Map & Info

777 South Flagler Drive
Philips Point
Suite 800 - West Tower
West Palm Beach, FL 33401

Phone: 561-487-0200
West Palm Beach, FL Office Map & Info

20801 Biscayne Boulevard
Suite 403
Aventura, FL 33180

Phone: 305-444-8660
Aventura, FL Office Map & Info

8201 Peters Road
Suite 1000
Plantation, FL 33324

Phone: 954-566-9000
Plantation, FL Office Map & Info

2255 Glades Road
Suite 324A
Boca Raton, FL 33431

Phone: 561-487-0200
Boca Raton, FL Office Map & Info

Broward County 954-566-9000
Palm Beach County 561-487-0200
Miami-Dade County 305-444-8660