Strategy To Pay Back Your Creditors After Chapter 13 Bankruptcy

A chapter 13 bankruptcy involves the construction of a repayment plan, usually with the help of a chapter 13 bankruptcy lawyer, to you pay off your creditors. As the construction of such a repayment plan is complicated, it is in your best interest to retain the services of an experienced chapter 13 bankruptcy lawyer. A chapter 13 bankruptcy lawyer can advise you about the construction of your repayment plan. If necessary, your chapter 13 bankruptcy lawyer can defend the plan during your bankruptcy case. As your chapter 13 bankruptcy lawyer will tell you, your repayment plan usually lasts between three to six years, depending on your income level.

Once your chapter 13 bankruptcy lawyer has submitted your bankruptcy petition along with your repayment plan, the court issues an automatic stay and your creditors must stop contacting you until the meeting of creditors. Your chapter 13 bankruptcy lawyer must make sure that your repayment plan contains the specification that you will make the payments each week or month at the same time.

Your chapter 13 bankruptcy lawyer will also take the type of debts you have into account when constructing your repayment plan. Priority debts are debts that receive exceptional treatment under the law, such as taxes; secured debts are debts that allow a creditor to seize certain assets if you default on your payments; and unsecured debts are debts that do not allow a creditor to seize any of your assets if you default. As your chapter 13 bankruptcy lawyer will inform you, all priority debts must be completely repaid. This is a major aspect to take into account when you and your chapter 13 bankruptcy lawyer construct your repayment plan.

For all secured debts, you will have to pay your creditor the minimum value of the property if you want to avoid the property being seized. As for unsecured debts, you are not required to repay them in full if all your disposable income is paid to them for three to five years, depending on your income level. When constructing your repayment plan, it is important that your chapter 13 bankruptcy lawyer informs that you must begin making payments in accordance with your repayment plan, even if it doesn’t have court approval yet. If the court does not approve of your repayment plan, you and your chapter 13 bankruptcy lawyer may rework it and resubmit it to the court.