Do I pay my Creditors When I File Chapter 13 Bankruptcy in Georgia?

When you file Chapter 13 bankruptcy in Atlanta, Georgia, you pay the Chapter 13 bankruptcy trustee one consolidated monthly payment for most of your debts. Chapter 13 bankruptcy is distinct from a Chapter 7 bankruptcy in that it allows the filer to reorganize debt and repay a portion of that debt (or sometimes all of it) under what is known as a Chapter 13 Plan. At the end of the Plan’s term (a maximum of sixty months), the debt will be officially discharged by the court. There is often some confusion among filers regarding the mechanics of exactly how repayment occurs. The payment is actually simplified because you make one payment to all of your creditors, except for your mortgage creditor.

Do I Still Have to Send Each of my Creditors a Check Each Month?

The general answer is no. When you file Chapter 13 you pay:

  • One consolidated payment to a bankruptcy trustee for all debts, including your car payment;
  • Your regular monthly mortgage payment;
  • Your student loans; and,
  • Your regular food, utilities, gas, and insurance expenses.
What Does the Bankruptcy Trustee do With my Payment?

The Chapter 13 Trustee takes the money you send to him or her and pays your creditors along the guidelines set forth in your Chapter 13 Plan. Creditors may be paid in full or be paid a pro rata share depending on the type of debt and the specifics of your individual Chapter 13 Plan. It is very important once you file Chapter 13 to make your plan payments to the Bankruptcy Trustee on time. Failure to do so can jeopardize your plan’s confirmation as well as your bankruptcy in general.

If you are considering filing for bankruptcy please consult an experienced bankruptcy attorney. For a free initial consultation please contact the Law Offices of Charles Clapp at 404.585.0040.