In a Chapter 13 bankruptcy, the debtor’s objective is to obtain court approval of a Chapter 13 payment plan that pays creditors as little as possible while still keeping all of their property. On the other hand, creditors will be seeking as much money as possible from the debtor under the Chapter 13 payment plan. Therefore, it is important to hire an experienced bankruptcy attorney in Tampa who knows the law and can advocate on your behalf. Creditors will likely have a team of attorneys on their side and it can be difficult to battle them without competent legal counsel.
Three Requirements of a Chapter 13 Payment Plan
Bankruptcy law will require the proposed Chapter 13 payment plan to satisfy many requirements before being approved. Below are three of the most common requirements imposed under Chapter 13 bankruptcy law. For information about the payment plan for a specific case you should contact a bankruptcy lawyer for assistance.
- Identify the sources of funds or other property that will be used to pay the debts. This entails the debtor committing a specified portion of their income to make the payments prescribed in the plan. The payments to creditors can be stretched out for up to 5 years. See bankruptcy law 11 U.S.C. 1322.
- The allocation of payments must be feasible for both the debtor and creditor. In terms of the debtor, it must be feasible that the borrower will be able to make the proposed payments based on the debtor’s current income. From a creditor’s standpoint, the payments must be feasible to satisfy the debt owed.
- Detail how the funds will be distributed amongst the creditors. The Chapter 13 payment plan must provide for secured claims to be paid the present value of the property that it secures, unless the creditor agrees to accept a lower amount as full satisfaction of the debt or the debtor surrenders the property. On the other hand, unsecured claims only have to be paid as much as they would have received if the debtor filed for Chapter 7, instead of Chapter 13. The amount the creditors would receive in a Chapter 7 depend on a multitude of factors, for more information contact a bankruptcy law firm in Tampa.
Creditors’ Objections to the Chapter 13 Payment Plan
Creditors do have a right to object to the proposed payment plan. However, if the payment plan allocates the funds in accordance with bankruptcy law the judge must approve the plan, despite the creditor’s objections. Your bankruptcy lawyer should be well versed in overcoming creditors’ objections, as it is a common practice in Chapter 13 bankruptcy.
Approval of a Chapter 13 Payment Plan
If the debtor makes all the payments under the court approved payment plan and satisfies all the other Chapter 13 requirements the debtor will be entitled to a discharge. The discharge is a permanent court order releasing the borrower from the responsibility of having to pay the debt.. Further, the discharge prohibits a creditor from taking any collection action against the borrower. In most cases, obtaining a discharge will be the primary reason why a borrower files for bankruptcy. However, there are many nuances of bankruptcy law which can prevent a discharge of certain debts. Therefore, it is important to seek the advice and counsel of an experienced Chapter 13 bankruptcy law firm in Tampa when pursuing relief in bankruptcy.
Chapter 13 Bankruptcy Law Firm
If you are having a difficult time meeting your financial obligations, Florida Law Advisers, P.A. may be able to help. Our bankruptcy attorneys have years of experience helping people just like you to solve their financial problems. We understand these are very difficult times and we are here to help. In some cases, filing for bankruptcy may be a good solution, however, it is often not the only solution available. The right course of action will depend on the unique circumstances of your case. To see which options may be available to you, contact us to today to schedule a free, confidential consultation with a Tampa bankruptcy attorney at our firm.