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Chapter 13 Bankruptcy in Raleigh will repay you to make monthly payments to the bankruptcy trustee. In turn, the bankruptcy trustee will pay your creditors on your behalf. In order to complete your plan, you need to make all of your payments. You get all remaining debts discharged once your Chapter 13 bankruptcy repayment plan is complete.
Individuals interested in Chapter 13 often ask us what debts they’ll need to repay under this plan. Ultimately, it will depend on your specific situation, which your Weik Law bankruptcy lawyer in Raleigh NC will discuss during your one-on-one consultation.
In general, however, there are certain debts you’ll have to pay in full, while others will only require you to pay a percentage of what you owe. Here’s an overview of both.
How Much You’ll Have to Pay Under Chapter 13 Bankruptcy
Again, some creditors are legally entitled to be paid back 100%. However, others will only receive a small percentage of what you owe them— sometimes nothing at all.
Typically, repayment plans under Chapter 13 bankruptcy must provide for the following:
Administrative claims
You have to pay this back 100%. Administrative claims include:
- The filing fees
- The commission of the bankruptcy trustee, which is anywhere from 3% to 10% of your monthly payments
Priority debts
Similarly, you need to pay back 100% of your priority debts. This covers:
- Missed child support payments
- Missed alimony payments
- Most federal and state income taxes
- Any money you owe to employees (such as commissions and salaries)
Mortgage defaults
Must be paid back 100% if you’d like to keep your home.
Car defaults
You’ll need to pay 100% of your missed car payments if you’d like to keep your vehicle.
Unsecured debts
For unsecured debts, you may need to pay them in full, not pay them back at all, or any figure in between. The exact amount depends on:
- How much the total value of your non-exempt property is
- How much monthly disposable income you have to pay towards your debts
- How long your Chapter 13 repayment plan is
This type of debt includes:
- Medical debt
- Credit card balances
- Utility balances
- Personal loans
- Cell phone bills
Any remaining amount under your unsecured debts are often discharged once you’ve completed your Chapter 13 repayment plan.
Your Weik Law bankruptcy lawyer in Raleigh NC will discuss secured and unsecured debts with you in detail, so don’t worry about remembering all of this right now.
How long does a Chapter 13 repayment plan last?
It ultimately depends on your income level. If it exceeds North Carolina’s median monthly income, for example, it usually lasts for the maximum 5 years. If your income is less than the medium, you may be granted a 3-year plan.
Take Charge of Your Debts Today
There are more things you need to understand about Chapter 13 bankruptcy in Raleigh. But one thing is true— it can be the key to a brighter, debt-free future. We’d love to walk you through your options, so you can make the best decision for yourself and the people you love.
Contact Weik Law Office today at 919-845-7877 to schedule a FREE consultation with one of our trusted and friendly bankruptcy attorneys