The Debts You Must Pay in Your Chapter 13 Plan

When filing for Chapter 13 bankruptcy, you are required to make a pre-determined monthly payment to your trustee who will distribute it to credit companies based on your repayment plan. It is the most important detail of this bankruptcy type. You should get a better idea of the debts that you will still have to pay off after filing your petition. Some of them must be paid in full, while other you can pay only partly.

You need to call a reliable and experienced bankruptcy attorney, such as ariano reppucci, to find out more about the main ins and outs involved and avoid common mistakes.

  1. Priority debts. They have the utmost importance based on existing bankruptcy laws, and that’s why they should be treated seriously. They include different support obligations, such as child alimony and spousal maintenance. Don’t forget about federal and other taxes, unpaid wages, and so on. Keep in mind that such debts must be paid in full when completing your Chapter 13 repayment plan.the word DEBT being carried by a small human
  2. Secured debts. If your credit companies can take back your property after defaulting (failing to make regular repayments), such debts are considered secured. For example, they include car loans and mortgages. Make sure that they all are addressed in your bankruptcy plan. If you prefer to give such assets, state this wish in your plan. If you want to keep your car and house, you should be prepared to pay back all loan installments in full. They all will be included in your repayment plan. The good news is that their interest rates can be reduced and you won’t have to pay any late fees. Another great thing is that all payments are stretched out over the duration of your bankruptcy plan, so that your monthly expenses will be reduced too. This is what can help you meet your debt obligations successfully.
  3. Non-priority unsecured debts. They include all remaining debts that you owe, such as unpaid credit card and medical bills, personal and consumer loans. The best part is that you don’t have to pay them back in full, and they don’t get any personal treatment in your Chapter 13 repayment plan. They are lumped together, so that you have to pay only their certain percentage. This amount depends on your regular income. Remember that you have up to five years to pay off your debts in accordance with bankruptcy laws and rules.