Chapter 13 is a specific form of bankruptcy that enables debtors to propose a repayment plan. This form of bankruptcy is ideal for individuals with sufficient income to create a debt repayment plan. The court may deny a Chapter 13 bankruptcy if the petitioner's income is insufficient or irregular. Chapter 13 is advantageous for debtors because they are permitted to retain personal property under the provisions of an accepted Repayment Plan. It may be the most crucial aspect of a Chapter 13 bankruptcy.
Repayment Plan Conditions
Within 15 days of the filing of a bankruptcy petition, a Repayment Plan must be submitted. The Plan stipulates periodic fixed payments to a bankruptcy trustee, who then distributes them to creditors. Claim status can be one of three categories. Priority claims are debts accorded special consideration under the bankruptcy code. Priority claims must be settled in full unless the creditor agrees to an alternative payment plan. Secured claims are debts for which collateral has been provided. Unsecured claims are debts that lack collateral backing.
Claim Types: Secured and Unsecured
Chapter 13 permits petitioners to retain certain assets so long as payments are made. Under this form of Repayment Plan, the debtor must pay the creditor at least the property's fair market value. In some instances, these payments are made in accordance with the original loan repayment plan. Unsecured debts are not required to be repaid in full, but each creditor must receive the same amount as if the petitioner had filed for Chapter 7 bankruptcy and liquidated all of his or her assets. A Chapter 13 Repayment Plan requires a petitioner to devote all of his or her disposable income to unsecured obligations over a specified time period. The term disposable income refers to any income remaining after all necessary and reasonable expenses have been paid. Food, shelter, utilities, and child support payments are essential costs.
Meeting with Creditors and Confirmation Hearing
Creditors have the opportunity to protest, dispute, or request modifications to the bankruptcy and/or proposed Repayment Plan at the 341 Meeting. The 341 Meeting is typically attended by the bankruptcy petitioner, his or her attorney, a bankruptcy trustee, and (rarely) creditor representatives. After the 341 meeting, the bankruptcy judge conducts a confirmation hearing within 45 days. During this hearing, the judge determines whether the Plan satisfies legal requirements and is financially feasible in light of the petitioner's financial situation. Creditors are notified of this hearing 25 days prior to its occurrence. This will give creditors the opportunity to object to the Plan's confirmation. If the judge approves the plan, a Chapter 13 trustee will distribute the monthly payments to creditors. If it is not confirmed, the petitioner may convert the case to Chapter 7 or submit a modified Chapter 13 Repayment Plan.""
" - https://www.affordablecebu.com/
