If you are experiencing financial hardship, Chapter 13 bankruptcy may provide some much-needed relief. Chapter 13 is a form of bankruptcy in which a consumer consolidates their existing debts. The bills are consolidated into one monthly payment made to a bankruptcy trustee according to the payment plan. Unlike Chapter 7, borrowers will not be required to sell assets as a condition of Chapter 13 bankruptcy payment plan. Rather, Chapter 13 is restructuring because the debtor makes payments to their creditors according to a court approved payment plan.
When to File the Chapter 13 Bankruptcy Payment Plan
When filing for Chapter 13, the petitioner must submit the plan within 14 days of filing the case. A debtor should always seek the aid of a Tampa bankruptcy attorney when submitting the Chapter 13 bankruptcy payment plan. An unsatisfactory payment plan can cause delays and unnecessary hardship for a debtor. The debtor must classify all debts and provide for payment of the creditors in accordance with bankruptcy law. For assistance with the payment plan contact a bankruptcy law firm in Tampa to schedule a consultation. Once the payment plan is confirmed by the court it will bind the debtor and each creditor included in the bankruptcy.
What Should be Included in the Chapter 13 Bankruptcy Payment Plan
The payment plan should outline how the income the borrower receives will be used to pay off the debts owed. The 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 on Chapter 7 click here.
Under Chapter 13 bankruptcy law, not all unsecured claims are treated the same. For instance, the Chapter 13 bankruptcy payment plan must provide for full payment of all unsecured priority claims. Examples of priority unsecured claims include but are not limited to the following:
- Domestic support obligations – ex. alimony, child support, etc.
- Administrative expenses of the bankruptcy
- Employee wages and benefits
Bankruptcy Law Firm in Tampa
Bankruptcy law can be very confusing and intimidating, especially when it involves a Chapter 13 bankruptcy payment plan. If you are considering seeking bankruptcy protection you should contact an experienced Tampa bankruptcy lawyer at Florida Law Advisers, P.A. for legal advice. We are a customer-service oriented firm with a strong reputation for providing personalized attention and dedicated legal counsel. For a free, confidential initial consultation call us today at 800 990 7763.