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Bankruptcy - Chapter 13 - Plan, Plan Payments & Confirmation

Bankruptcy - Chapter 13 - Plan, Plan Payments & Confirmation

BANKRUPTCY: Chapter 13 - Plan, Plan Payments, Confirmation Hearing and Confirmation of Plan: How much will I have to pay? How long will I make payments?

Q. What is a Chapter 13 Plan?

A. A Chapter 13 Plan is the order of the court that tells the Trustee what to pay, who to pay and when to pay. You will initially prepare and file the Plan with the Court. The Plan must provide for which debts will be paid under the Plan, the order in which they will be paid total amount to be paid to each class of creditor. The Plan must strictly follow bankruptcy law on each of these areas.

Q: How long will I have to make payments on my Plan?

A. Your Plan will provide for a term of either three (3) years or five (5) years. If your income is less than the median income (i.e. you pass the Means Test), you can file a three (3) year Plan. If your income is above the median income (i.e. you fail the Means Test), you must file a five (5) year Plan. If you are eligible to file a three (3) year Plan, you may choose to make your payments over a longer period of time (up to 5 years) if you need that to be able to lower your payments but still pay all that is required by your Plan.

Q: How much will I have to pay each month on my Plan?

A. Generally, your monthly payments under the Plan must equal the amount of your discretionary income plus the prorated amount(s) necessary to pay off your secured debt (except residence), certain priority debts (past due taxes, etc.), past due amounts on secured debts, your attorney's fees and the trustee's fees/administrative expenses of the bankruptcy. The amount of your discretionary income will be approximately the amount by which your income exceeds the Means Test current income standards.

Q: Is there a minimum amount that I must pay under my Plan?

A. Yes. Your Plan must provide for the payment to unsecured creditors of an amount equal to at least as much as they would have received if you had filed a Chapter 7 case, and all of your non-exempt assets (net of secured debt) had been sold for their benefit.

Q: Will I lose all of my property if I file a Chapter 13 Bankruptcy?

A. No. You are allowed to keep your car, house or other property under a Chapter 13. If that property is security for a debt (i.e. mortgage loan or car loan), then you must keep future payments on the debt current in order to keep the property, and your Plan must include provisions to pay-off any past due loan payments.

Q. What is a Confirmation Hearing?

A. In addition to the Creditors Meeting, the Court will schedule a Confirmation Hearing. It will be set about two months from the date of filing the case. At that hearing, any issues or objections to the terms of your proposed Plan will be resolved. Usually, your attorney will be able to discuss your Plan with the Trustee and/or creditors prior to the hearing, and there will be a recommendation that the Plan be approved ("Confirmed") by the Court. If there any unresolved issues, the judge will hear the objections and issue a decision approving or rejecting the Plan.

Contacting the Right Attorney: Bankruptcy can be a complicated matter. The responses to these Frequently Asked Questions are general in nature, and are not intended to provide legal advice for specific cases. A consultation with a Georgia bankruptcy attorney can provide you with the information you need to determine which option best addresses your circumstances. As a solo practitioner, I am able to give more time and personalized attention to my clients. I will personally communicate with creditors or banks to resolve your issues. Your case will never be handed down to a legal assistant or other staff member.

NOTICE: The services or benefits offered are bankruptcy relief under the provisions of the U.S. Bankruptcy Code. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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