If you're interested in filing for Chapter 13 bankruptcy, it's important to learn more about the repayment plan.
Generally speaking, you are required to file a repayment plan alongside your Chapter 13 bankruptcy petition. If you don't do so at the same time, you must file the repayment plan within 15 days.
In short, your repayment plan proposal must include an outline of fixed amounts to be paid to the trustee on a monthly (or sometimes bi-weekly) basis. If approved, the trustee will then distribute the funds to creditors based on the terms and conditions of the plan.
There are three types of claims associated with a Chapter 13 bankruptcy repayment plan: priority, secured and unsecured.
A priority claim is one that is granted special status, such as most types of taxes. A secured claim means that the creditor has the right to repossess certain types of property if you do not pay the debt. Finally, an unsecured claim is for those situations when the creditor does not have the right to collect against property.
All priority claims must be paid in full unless a creditor agrees to a different arrangement.
If you have any interest in Chapter 13 bankruptcy, you will want to learn more about the repayment plan and how it will impact you now and in the future. By taking the right steps upfront, you don't have to worry about making a mistake that will cause you trouble in the future.
There is a lot that goes into a Chapter 13 bankruptcy filing, so make sure you have the right help on your side from the start.
Source: FindLaw, "Chapter 13: Repayment Plan and Confirmation Hearing," accessed March 10, 2017