Restructuring Your Debt Through a Chapter 13 Plan

by DeLadurantey Law Office, LLC on November 10, 2014

Calculator & BillsWhen you file a Chapter 13 case, you must create a repayment plan to be approved by the bankruptcy court. Your Chapter 13 plan must outline how you intend to pay you creditors according to the type of debt they hold. The plan must last three to five years, depending on your income and the total amount of debt to be paid under the plan. During this time, you must make a monthly payment to the Chapter 13 trustee who will distribute the proper payments to your creditors according to the terms of the approved plan.

Every creditor’s claim is given a certain priority under the law and your creditors are paid according to their status. Certain debts such as child support and taxes are considered priority claims that generally must be paid in full.

Your secured creditors are those that have an asset pledged as collateral as support for the loan. The most common secured creditors are the mortgage-holder on your house and the lender that holds a lien on your vehicle. Depending on the type of bankruptcy case filed, your car loan may be required to be paid in full or you may be allowed to “cram” it down to the value of the car. To learn more about cramming down a vehicle, please read our blog titled “Cram Down of a Car Loan.”

Your unsecured loans, such as credit cards and medical bills, can be paid wholly or partially. In some cases, you may not have to pay your unsecured claims at all as long as your use all of your projected “disposable income.” You must also pay your unsecured creditors at least the same amount as they would have received if you had filed a Chapter 7 case.

If you are interested in filing a Chapter 13 bankruptcy case to restructure your finances, we can help.

Contact The “Milwaukee Bankruptcy Attorneys,” DeLadurantey Law Office, LLC.   DeLadurantey Law Office focuses on student loan debt, Chapter 7 and 13 bankruptcy, debtor’s rights, debt negotiations, debt relief, mortgage loan modifications, and foreclosure defense. A “defender of the little guy, DeLadurantey Law Office serves the following location – Milwaukee, South Milwaukee, West Milwaukee, Waukesha City, Waukesha Town, Kenosha, Racine, and all other municipalities in Milwaukee County, Waukesha County, Kenosha County, and Racine County. We can be contacted by phone: (414) 377-0518 and can be found on the Internet and on Facebook.

 

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