Chapter 13 Bankruptcy Plan in Atlanta, Georgia

One of the documents that you must file with the court in a Chapter 13 bankruptcy is known as the Chapter 13 Plan.  The Plan is an outline of how much you will pay to your creditors and how the money will be disbursed each month.  Depending on your income or the amount of time that you need to repay your debts, the Plan should last between 36 and 60 months but cannot exceed 60 months.  The Plan gives the bankruptcy trustee an outline of which creditors you are paying and how much should be disbursed to them each month.  Creditors have specific rankings in bankruptcy and are paid accordingly.  There are several different types of creditors, including secured creditors, priority creditors, and unsecured creditors.  Secured creditors are normally given the best treatment in a Chapter 13 bankruptcy case.  Such creditors include your car and mortgage creditors.  If you choose to keep either your car or your house, you must pay these creditors.  Creditors who are second in line are known as priority creditors. Priority creditors include taxes and domestic support obligations and must be paid through the Chapter 13 plan.  Finally, the creditors who are last in line are the unsecured creditors, which are usually credit card companies and medical bills.  Your Chapter 13 Plan proposes to pay the unsecured creditors anywhere from 0% to 100% of their claims, depending on your income and assets.  The Plan is an essential part of filing a Chapter 13 and give the trustee a guide as to how creditors are paid.  The Plan must be approved by the court.