When people hear the word bankruptcy, most of the time a Chapter 7 bankruptcy comes to mind—the kind of bankruptcy where assets are taken and sold to repay debts and your debts are totally discharged. There is, however, another kind of personal bankruptcy, the Chapter 13 bankruptcy that allows you to keep your assets. In a Chapter 13 bankruptcy, instead of selling your assets to repay creditors, you will repay your creditors some or all of what you owe through a debt repayment plan.
What is a Georgia Chapter 13 Debt Repayment Plan?
If you choose to file a Chapter 13 bankruptcy, you will need to create a debt repayment plan. A repayment plan is a financial plan you will give to the bankruptcy court that details how you will pay back your debts. The plan establishes a payment amount that will go toward your debts—this amount will be paid monthly for typically 3-5 years.
If you are considering filing a Chapter 13 bankruptcy, here are a few more things you should know about the debt repayment plan:
- Creating this repayment plan can be complicated, so it’s important to get the help of an experienced Georgia bankruptcy attorney to assist you with the plan.
- If you want to keep your house as part of your plan, you will need to first pay off any mortgage payments you missed. Then you will need to continue making regular payments.
- To file a Chapter 13 bankruptcy, you will need a source of income and some disposable income that will go toward the plan. The amount you pay monthly includes your disposable income plus certain secured debts.
- Disposable income is calculated based on your estimated monthly income minus your monthly expenses—disposable income is paid to the trustee who will then give it to your unsecured creditors according to your plan. These debts are usually not paid back in full; any remaining unsecured debt is discharged at the end of your plan.
- Some debts will still need to be paid back in full. These are called priority debts and include some tax debt as well as back child support and alimony.
- If you miss payments over the course of your plan, your bankruptcy could be dismissed. However, if you follow your plan, and make your monthly payments, the rest of your dischargeable debt will be eliminated at the end and you can keep your assets.
Get Advice on Chapter 13 Bankruptcy
A Chapter 13 bankruptcy can be a great option for someone who is facing a difficult financial situation but wants to keep their property. If you are in a tough spot financially and a debt repayment plan sounds like a good option for your circumstances, you may want to consider a Georgia Chapter 13 Bankruptcy. An experienced bankruptcy at The Ballard Law Group can answer any questions you have about debt repayment plans during a free consultation at our office. These plans can be tricky, so it is best to have the assistance of a skilled lawyer so that you can create a plan that will get you on a path toward financial freedom. Contact our office today at (404) 800-9939 to schedule your free consultation.