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What should you consider when making your Chapter 13 plan?

If you are dealing with debt in Washington, D.C., but are able to make monthly payments, filing for Chapter 13 bankruptcy may provide you with the relief you need. As a part of your Chapter 13 filing, you will develop a plan to pay back a portion, or al, of your debts. At Ammerman & Goldberg “Bankruptcy” Law Office, we know the process of creating a Chapter 13 repayment plan may seem daunting. In this post, we will help you understand what factors you should consider when developing a plan for your Chapter 13 bankruptcy.

When you are creating your Chapter 13 repayment plan, it is important to think about the types of debt you hold. For example, the U.S. Courts points out that priority claims must be paid in full through your plan, unless you have an agreement that specifies otherwise. Priority claims include taxes and court fees, among other debts, and they are given special status under federal bankruptcy law. If you want to keep the collateral that is associated with your secured debts, then you must repay them in full or pay back at least the value of the collateral. Provided you are applying all of your disposable income over the plan period toward your repayment plan, you may not be required to pay back all of your unsecured debts.

The repayment plan is an essential element of Chapter 13 bankruptcy filings. Therefore, you must make certain you will be able to keep up with the required payments over the life of your plan. With few exceptions, Chapter 13 repayment plans will span three or five years from the date of your filing. According to the U.S. Courts, you must start making your plan payments within 30 days of filing your bankruptcy petition. This is the case even if your plan has not yet been approved.

For more information about debt reorganization, please visit our Chapter 13 bankruptcy page.

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