Chapter 13 Repayment Plan

: Reese Baker & Associates

  Filed under: bankruptcy, Chapter 13

chapter 13, repayment, trustee, court, bankruptcy attorney houston, texas bankruptcy lawyers, attorney, lawyer, attorneys, lawyers, College Station, Bryan, Houston, Texas, TX, lawyers in houston, bankruptcy attorney,A Chapter 13 bankruptcy is a pre-approved repayment plan administered by a qualified bankruptcy trustee after a court has determined that an individual qualifies for this type of protection. The repayment plan is designed to allow creditors to recoup their money from a debtor over a pre-determined period of time, usually 3 to 5 years.

The payment plan requires a schedule that allows for certain creditors to take priority over others. Secured and priority debts are the first to be considered when determining a repayment schedule with all other creditors taking a back seat. After satisfying these lenders any remaining disposable income will be used to fulfill obligations to other non -priority and unsecured creditors.

Most plans allow for biweekly or monthly payments, these are sent to the trustee who then disburses the payments to the creditors according to the schedule agreed upon in the court proceeding less the trustees administration fees. If able, it benefits an applicant to make repayment to certain creditors outside of the plan as this can save them money by bypassing the trustee fee. Some plans allow for mortgage payments to be made outside of the plan as well as car payments.

These differ from court to court so contacting a qualified bankruptcy lawyer to determine exactly how to proceed should always be considered before any action is taken by a debtor. Having a professional in your corner can make all the difference when trying to navigate the difficult issues facing a debtor in a Chapter 13 situation.