Brand

Broward County954-566-9000
Palm Beach County561-487-0200
Miami-Dade County305-444-8660
Indian River County 772-564-1321
Broward County
954-566-9000
Palm Beach County
561-487-0200
Miami-Dade County
305-444-8660
Indian River County
772-564-1321
Your Road To A Better Future

The Chapter 13 repayment plan

On Behalf of | Nov 19, 2021 | Chapter 13 |

Chapter 13 bankruptcy can be a great solution for people in Florida who have overwhelming debt and a lot of assets they want to keep. Rather than facing a liquidation like in Chapter 7, people that file Chapter 13 hold onto their assets and work out a manageable debt repayment plan with their creditors.

How does a repayment plan work?

Chapter 13 repayment plans are similar to debt consolidation plans. Instead of making multiple payments to all of your creditors each month, you’ll make a single payment to the bankruptcy trustee. The difference is that your bankruptcy repayment plan will end after a period of time, and most of the remaining unsecured debt will be discharged.

Priority debts, secured debts, and unsecured debts

Chapter 13 repayment plans can be complicated since not all of your debts will be treated equally. Certain debts will be considered priority ones that must be paid in full during the course of your bankruptcy. Priority debts may include:

• Back taxes
• Child support
• Spousal support
• Bankruptcy filing fees

Your secured and unsecured debts will be treated differently from priority debts. Secured debts, which are backed by collateral such as a home or a car, may need to be paid in full. However, there are some cases where you can settle a secured debt by paying off the value of the collateral.

Unsecured debts like credit card balances, medical bills, and personal loans are the last priority in a Chapter 13 repayment plan. These debts do not have to be paid in full, and the remaining balance on these debts will be discharged once your repayment plan is completed.

How long will the repayment plan take?

After your Chapter 13 repayment plan is approved, you can expect to be making payments for between three to five years. The exact payment amount will be based on the amount of debt you have and what you can afford given your income and household expenses.