Chapter 13 Repayment Plan Basics

Chapter 13 bankruptcy protection can offer an excellent way to manage your debt without being forced to surrender your property. For the duration of the repayment period, you will remit a set payment to a bankruptcy trustee. These trustees are court appointed officials who use your payments to pay your creditors, collecting a small commission on each payment.

If you can successfully complete each payment for the duration of your plan, remaining debt can be discharged and you will be free and clear of the creditors that would otherwise be hounding you for compensation. Chapter 13 does require that you continue to work hard to cover your debts, and may require significant lifestyle alterations in order to maintain payments out of limited disposable income.

What You Pay For

Different kinds of debts are categorized differently with regard to a Chapter 13 bankruptcy, and many types of debt must be paid in full. Your Chapter 13 repayment plan will require you to pay 100% of the following debts:

• Alimony and child support debt (back payments included)
• Salaries, wages, and other payment owed to your employees
• Taxes
• Filing fees
• Mortgage payments, defaults included (if you wish to keep your house)
• All other secured debt, such as car payments

All other debt falls under the ‘unsecured’ category, concerning things such as credit card debt. The percentage of this debt you pay will be determined by the length of your plan and your disposable income, and the rest may be discharged with the successful completion of your payment plan.

Contact Us

Overwhelming debt can seem like an insurmountable barrier to financial independence, but Chapter 13 bankruptcy can help you to manage this crisis. Contact the experienced and knowledgeable Houston bankruptcy lawyers at the Russell Van Beustring P.C., at 713-973-6650 for a consultation to discuss the details of your financial situation and learn more about your options.