Unsecured Debts in Chapter 13 Plans

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Unsecured Debts in Chapter 13 Plans

Chapter 13 Bankruptcy filers generally have to pay a regular monthly payment to the Chapter 13 Trustee. The subject monthly payment is determined by the amount necessary to cure mortgage arrears over a period of up to 5 years or disposable monthly income, in the event any exists. The Bankruptcy Code strictly regulates for the distribution of payments in a Chapter 13 Bankruptcy. Priority debts, including administrative expenses, family support obligations (child support and alimony), and recent tax obligations must be paid in full. However, there is no requirement that under the plan that unsecured debts such as credit cards, medical bills, personal loans, payday loans and utilities need to be paid any amount in a Chapter 13 Plan. In the Eastern District of Pennsylvania, sometimes a Chapter 13 Debtor may reduce their unsecured debts to zero percent repayment through through a Chapter 13 Plan. The reduced unsecured payment can save a Chapter 13 filer a tremendous amount of money in interest, fees, costs and penalties all associated with unsecured debts. Each individual or family’s situation is different, however if you are considering filing a Chapter 13 filing, our office a free initial consultation with a lawyer who can analyze your situation and how a Chapter 13 repayment PLan can be beneficial to you.

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008 or 610-432-3111 or email brad@sadeklaw.com. Thank you.

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