Chapter 13 is a form of bankruptcy that’s ideal for those who are working and need assistance paying off their debts. This type of bankruptcy allows you to consolidate your debts and make one monthly payment to a trustee who pays your creditors. This process simplifies your monthly payments while ending your contact with your creditors. When filing a Chapter 13 bankruptcy, you need to know what to expect. You’ll need to develop a repayment plan that addresses the three different types of creditors: priority, secured, and unsecured. Article by:
You’ll Need A Copy Of Your Most Recent Credit Report
The first step is to gather all necessary documents. You’ll need a copy of your most recent credit report. You’ll also need to pay filing and administrative fees. Once your bankruptcy is filed, an independent trustee will evaluate your case and distribute the bankruptcy funds to your creditors. This process will take 20 to 50 days.
The repayment plan in a Chapter 13 bankruptcy must pay your priority debts and recent tax obligations. You must also pay any arrears on secured debt if you want to keep your property. Then, you’ll use your disposable income to pay your unsecured debts. Ultimately, the repayment plan will be approved by the court.
A Chapter 13 repayment plan can last three or five years. The length of the plan depends on the income and size of your family. The court will review the repayment plan and decide whether or not it is reasonable. Once approved, your payments will be made to a chapter 13 trustee who pays your creditors listed in the plan and proof of claim. Your proof of claim will list the type and amount of your debts. You can keep your home and other valuable property through this method of bankruptcy. And the court will stop your creditors from harassing you or calling you or contacting you to collect more money.