Chapter 13 Payment Schedule
People who are planning to file for bankruptcy often choose between the liquidation or reorganization bankruptcy procedure. If you wish to secure your assets while paying the debts you owe, declaring bankruptcy under Chapter 13 could be the best option for you. Here, whatever is left after deducting permitted expenditure (your disposable income) goes towards a debt repayment plan approved by the bankruptcy court.
Bankruptcy cases have helped countless individuals facing problems with their finances. However, because of the paperwork and supporting documents involved, filing for bankruptcy can be very stressful. It is best to consult with a trusted Jackson bankruptcy attorney as soon as possible.
Types of Debt You Must Repay Under Chapter 13 Bankruptcy
If you seek debt relief and have decided to file bankruptcy under Chapter 13, you will be required to propose a payment plan that should enable you to repay debts in three or five years. It is generally recommended to seek legal advice from a credible local attorney before working on the necessary bankruptcy forms. Call our law firm at 707-596-6641 to schedule a consultation today.
The trustee in bankruptcy filings will work with you to allocate payments to creditors, particularly for the following:
Priority Debts
Priority debts that you must pay in full include:
- Missed child support or alimony payments,
- unpaid federal or state taxes,
- wages owed to employees, and
- other priority debts that you must pay in full
Secured Debts
Secured debts that are due to be paid in full within the duration of the repayment plan should also be repaid. Although, you may cram down a home or car equity loan to minimize the balance (depending on the actual circ*mstances).
Secured Loans
Secured loans that will not expire during the payment plan’s duration, such as a tax lien
Certain Non-Priority Unsecured Debts
The cumulative amount that lenders of non-priority unsecured debts would be receiving if you filed for Chapter 7 bankruptcy instead
Administrative Costs
Administrative costs associated with filing for bankruptcy, such as filing, bankruptcy trustee, and attorney fees
Working on Your Debt Repayment Plan
Under relevant bankruptcy laws, a debtor who wishes to keep the property and avoid foreclosure must pay off their real or personal property arrearages. This is especially applicable to keep a secured asset, such as a home or a vehicle. Some bankruptcy courts will require mortgage payments to be made directly to lenders, while others need you to include them in your debt repayment plan.
In general, bankrupt individuals are often given 36 or 60 months to pay back what is owed, with higher income filers usually paying more per month. The actual time will depend on the median income and your monthly income six months before filing a bankruptcy petition. Additionally, electricity, phone, tax, and child support payments are often made outside the payment plan.
It is highly recommended to seek legal assistance early to avoid mistakes that could complicate your filing. Our dedicated and hands-on Jackson bankruptcy lawyers will assist you on how to file, explain relevant state law, and help you have a successful bankruptcy filing.
Average Monthly Payments in a Chapter 13 Bankruptcy Declaration
Many individuals with financial problems are curious about how much they will likely have to pay monthly if they file for reorganization bankruptcy.
A Chapter 13 petition for bankruptcy will likely necessitate a $500 to $600 monthly payment, especially for debtors paying at least one automobile through the payment plan. However, since the bankruptcy court will consider a large number of factors, this estimate could vary greatly.
When higher income and housing repayment requirements are involved, the average payment goes up to $1000 to $2000 or more. If you filed for bankruptcy to avoid foreclosure or are behind in house payments, your Chapter 13 plan payment could be more or less $1500 per month. Additionally, high income, high debt Chapter 13 filers would usually be required to make payments between $2000 and $3000, or even more.
On the other end of the spectrum, however, basic repayment requirements could go as low as $200 to $300 per month. This is often applicable to a debtor who was forced to file Chapter 13 because he is barred from filing a Chapter 7 (since they filed a previous one recently).
Seasoned Jackson bankruptcy lawyers can help you learn more about these situations. Call our law firm today at 707-596-6641 to schedule a consultation.
Get Legal Help from Reliable Jackson Bankruptcy Attorneys
There are different ways of dealing with debt settlement. One of these is looking into filing Chapter 13, which is one of the many types of bankruptcy proceedings that may apply to you. If you are considering bankruptcy, get in touch with a local attorney from a trusted Jackson bankruptcy law firm. Call us at the Rollins Law Firm to consult with credible Jackson bankruptcy attorneys.
