An Overview of Chapter 13 Bankruptcy
The Chapter 13 Repayment Plan
This form is the most important paper in your entire Chapter 13 bankruptcy case. It describes in detail how (and how much) you will repay each of your debts. There is no official form for the plan, but many courts have designed their own forms.
Making Payments on the Repayment Plan
You must begin making payments under your Chapter 13 repayment plan within 30 days after you file it with the bankruptcy court. Usually, you make payments directly to the bankruptcy trustee (the person appointed by the court to oversee your case). Once your repayment plan is confirmed, the trustee will distribute the money to your creditors.
If you have a regular job with regular income, the bankruptcy court may order that your monthly payments be automatically deducted from your wages and sent directly to the bankruptcy court.
How Much You Must Pay
Your Chapter 13 plan must pay certain debts in full. These debts, which include child support and alimony, wages you owe to employees, and certain tax obligations, are called "priority debts," because they're considered sufficiently important to jump to the head of the bankruptcy repayment line.
In addition, your plan must include your regular payments on secured debts, such as a car loan or mortgage, as well as repayment of any arrearages on the debts (the amount by which you've fallen behind in your payments).
The plan must show that any disposable income you have left after making these required payments will go towards repaying your unsecured debts, such as credit card or medical bills. You don't have to repay these debts in full (or at all, in some cases). You just have to show that you are putting any remaining income towards their repayment.
How Long Your Plan Will Last
The length of your repayment plan depends on how much you earn and how much you owe. If your average monthly income over the six months prior to the date you filed for bankruptcy is higher than the median income for your state, you'll have to propose a five-year plan. If your income is lower than the median, you may propose a three-year plan. (To get the median income figures for your state, go to the United States Trustee's website,
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