The debtor files a bankruptcy petition with schedule of assets and liabilities and statement of financial affairs, along with a Chapter 13 plan. The plan provides for repayment of the debtor's debts over a 3-5 year period, from the future earnings of the debtor. A trustee is appointed to receive payments from the debtor and disburse them to creditors. The debtor remains in possession of all of his property, exempt and non-exempt. Upon completion of payments under the plan, the debtor typically receives a discharge, even if he has paid less than 100% of the debt. Certain debts, however, must be paid in full to be discharged, such as:

• Certain child and spousal support debts
• Restitution orders and criminal fines
• Debts caused by the debtor's drunk driving
• Most student loans
• Recent taxes

     The debtor attends a meeting of creditors. Creditors are not entitled to vote on the plan, but are allowed to file objections to the plan if they believe that the plan does not comply with Chapter 13 requirements.

Creditor Payments

     Creditors will receive differing amounts of money under a Chapter 13 plan, depending on the nature of the debt, i.e., whether priority, unsecured non-priority, or secured. Priority debt typically includes recent taxes (generally less than 3 years old), and certain spousal and child support claims. Unsecured non-priority debts include older income taxes (generally, more than 3 years old), credit card debt, medical bills, personal loans, and any deficiency claims. Secured debts include real estate mortgage loans, car loans, and furniture and jewelry loans.

     These payments are made by the debtor making payments to the trustee, and the trustee then making disbursements to the creditors. 

     More detailed information about filing Chapter 13 and the law, written by Henry Rendler, can be found at Bankruptcy-Attorney.com/Chapter-13.

Contacting Us

For an appointment in regards to the above issues, the law office of Henry Rendler can be contacted at at 408.293.5112.