What is the Chapter 13 Bankruptcy repayment plan?

Chapter 13 Bankruptcy is a type of legal protection available to individuals in New York who are facing financial troubles. While Chapter 7 Bankruptcy dissolves most types of debt, Chapter 13 Bankruptcy allows the filer to create a repayment plan to pay back creditors over a three to five-year period of time. Under the Chapter 13 Bankruptcy repayment plan, the filer must propose a repayment plan for his or her creditors. This plan must include a list of creditors, the amount of money owed to each creditor, and the payment schedule. All payments must be made according to these terms – no payment can be missed or skipped. In addition, the filer must also submit a budget to the court that outlines all of his or her income and expense details. The filer must also make regular payments to a trustee, who is responsible for distributing the payments to the creditors according to the terms of the repayment plan. Typically, filers must pay all of their disposable income towards their debt and the trustee will distribute these payments accordingly. Once the repayment plan is approved by the court, the filer must stick to the terms of the repayment plan. If the plan is completed, the remaining unsecured debt is discharged. In this way, the filer can prevent creditors from taking legal action against them while having the chance to get back on track with their finances.

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What is the Chapter 13 Bankruptcy repayment plan?

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