Chapter 13 Plan
In his chapter 13 plan, the debtor sets forth his proposal to reorganize his debt. If approved by the Bankruptcy Court, the plan is confirmed. The plan may be 36 to 60 months in length.
Priority claims, such as alimony, child support, and certain taxes must be paid in full.
Secured debt, such as mortgages and car loans, may also be dealt with in a chapter 13 plan. Mortgages secured only by a principal residence may not be modified, but a chapter 13 debt is allowed to reinstate any payment arrearages over the length of the plan to avoid a foreclosure.
General unsecured claim may also be provided for a chapter 13 plan. These claims receive a distribution based on the amount of one's nonexempt property and the amount of one's projected disposable income. Often general unsecured claims only receive a small percentage of their claim and the balance is discharged.
Priority claims, such as alimony, child support, and certain taxes must be paid in full.
Secured debt, such as mortgages and car loans, may also be dealt with in a chapter 13 plan. Mortgages secured only by a principal residence may not be modified, but a chapter 13 debt is allowed to reinstate any payment arrearages over the length of the plan to avoid a foreclosure.
General unsecured claim may also be provided for a chapter 13 plan. These claims receive a distribution based on the amount of one's nonexempt property and the amount of one's projected disposable income. Often general unsecured claims only receive a small percentage of their claim and the balance is discharged.