Fremont Bankruptcy Attorney Talks ABout Chapter 13 Plan Payments
Fremont Bankruptcy Attorney Talks About Chapter 13 Plan Payments
Debtors in a Chapter 13 bankruptcy have agreed to a repayment plan to their creditors. Specifically, in the bankruptcy petition, the debtors propose a Chapter 13 payment plan. The plan will pay off certain secured and priority creditors in full and then, if feasible, unsecured creditors will get none, some or all of their claims paid off. The amount that unsecured creditors receive varies based on the debtors’ income and expenses. This amount is calculated by a formula that was created by the US Government which severely limits the type of expenses that debtors can claim.
Once a plan payment is proposed in the Chapter 13 Bankruptcy Petition, the US Trustee and court must approve it. There are a few levels of review but, ultimately, a plan is approved for a term of either 36 months or 60 months. Once approved, the Debtors are expected to pay this amount each month, on time, in either a cashier check or money order.
If Debtors cannot make the payments make the payments for any reason, it is much better to be proactive than reactive. The Debtors should contact the Trustee’s office by phone or letter to explain why the payment shall be late. Specifically, the Debtors should explicitly outline when the payment will be made or how the late payment will be repaid at a later date. For example, if the payment will be 1 week late, then a phone call and letter stating that it will be 1 week late is acceptable communication. However, if the Debtor needs to miss a month and wants to make up the payment over a series of payments, the US Trustee should contacted and the repayment plan approved. Finally, if the Debtors can no longer make the payments due to a change in circumstances, such as injury or loss of employment, the US Trustee needs to be contacted so that they can consider their options. The options include permanent modification of the plan, conversion to a chapter 7 bankruptcy, or dismissal of the chapter 13 plan all together.
If you have a question regarding your Chapter 13 Plan please contact Sagaria Law at 1-800-941-6730 for a free consultation or visit us at www.sagarialaw.com. Our team of Bankruptcy Attorneys can assist you with all aspects of your case. We have attorneys in San Mateo, Monterey, Fremont, Salinas, Sacramento and San Jose.
