Chapter 13 Bankruptcy: How Much Do I Have to Pay My Creditors?

TL;DR

Chapter 13 bankruptcy involves creating a plan to pay off some debts over a 60-month period, but the amount you have to pay depends on factors like the specific debts, your income, expenses, and non-exempt assets.

Transcript

hey everybody John skiba here from the consumer Warrior YouTube channel and in this video we are going to talk about chapter 13 bankruptcy and how it is that we calculate the plan payment and determine how much your creditors are actually going to receive through this chapter 13. this is going to get a little complicated let's go ahead and do it if... Read More

Key Insights

• 🌱 Chapter 13 bankruptcy involves proposing a plan to pay off debts over a 60-month period.
• 😨 Certain debts, such as car payments, taxes, and mortgage arrears, must be paid in full through the plan.
• 📼 The amount you have to pay your creditors depends on your income, expenses, and non-exempt assets.
• 🖐️ Disposable income, which is the difference between your income and monthly budget, plays a significant role in determining the plan payment.
• 📼 Non-exempt assets may increase the amount that has to be paid to creditors.
• 💼 Hiring an attorney is highly recommended for navigating a Chapter 13 bankruptcy case.
• 👻 Chapter 13 bankruptcy allows you to keep all your assets, but a hypothetical Chapter 7 bankruptcy analysis is performed to ensure creditors receive a minimum amount.

Questions & Answers

Q: How is the amount to be paid to creditors determined in a Chapter 13 bankruptcy?

The amount you have to pay depends on several factors, such as the specific debts that must be paid in full, your income, expenses, and non-exempt assets. It is a fact-specific calculation that varies from case to case.

Q: Do I have to pay my car payment through the Chapter 13 plan?

Yes, if you want to keep your car, you will have to make the car payment through the plan. This payment will be included in the monthly plan payment.

Q: Can I include my attorney's fees in the Chapter 13 plan?

Yes, it is common for attorney's fees to be included in the Chapter 13 plan. The fees will be added to your monthly plan payment.

Q: Will I lose any assets in a Chapter 13 bankruptcy?

No, in Chapter 13 bankruptcy, you get to keep all your assets. However, a hypothetical Chapter 7 bankruptcy analysis is run to ensure that your unsecured creditors receive at least as much as they would have in a Chapter 7 case.

Summary & Key Takeaways

• Chapter 13 bankruptcy involves proposing a plan to pay off some debts over 5 years.

• Certain debts, such as car payments, taxes, and mortgage arrears, must be paid in full through the plan.

• The amount you have to pay depends on your income, expenses, and non-exempt assets.