What is a chapter 13 plan?
It is a written plan presented to the bankruptcy court by a debtor that states how much money or other property the debtor will pay to the Chapter 13 trustee, how long the debtors payments to the Chapter 13 trustee will continue, how much will be paid on each of the debtors debts, which debts will be paid outside of the plan, and certain other technical matters.
A Chapter 13 plan generally means a plan for repayment of debt approved by the bankruptcy trustee. Some debts under the plan must be paid in full (back taxes and child support are the most common examples), while others may be paid only in part. The basic idea is that you must devote all of your disposable income to whatever plan is approved by the bankruptcy court. With a few exceptions, Chapter 13 doesn’t require you to give up any property — for that reason, it’s the bankruptcy of choice for folks who have significant amounts of nonexempt property. If you do file for a Chapter 13 bankruptcy, the minimum amount you will have to pay is roughly equal to the value of your nonexempt property. Since very few prospective Chapter 7 bankruptcy filers have much nonexempt property, this won’t be an issue for most people. In addition, you must pledge your disposable income (net income less reasonable expenses) over the life of your plan.
ANSWER – It is a written plan presented to the bankruptcy court by a debtor that states how much money or property the debtor will pay to the chapter 13 trustee, how long the debtor’s payments to the chapter 13 trustee will continue, how much will be paid to each of the debtor’s creditors, and certain other matters.
