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How to Develop a Chapter 13 Bankruptcy Repayment Plan


Chapter 13 provides a solution for borrowers who are struggling to repay their debt. During Chapter 13 bankruptcy, you can repay your debt over a long period of time without risking any of your property. The repayment plan is central to the Chapter 13 process. The repayment plan is a legal document that outlines how you will repay your creditors. Below, our Orlando Chapter 13 bankruptcy lawyer offers tips on how to develop your plan.

What is the Repayment Plan in Chapter 13 Bankruptcy? 

The repayment plan in Chapter 13 bankruptcy is a proposal you submit to the bankruptcy court. It details how you plan to replay all or a portion of your debt. Your repayment plan can extend anywhere between three and five years. The repayment plan is a critical part of the Chapter 13 bankruptcy process. You must carefully consider a number of factors including your assets, expenses, income, and the nature of your debts.

Assess Your Financial Situation 

Before you embark on developing your repayment plan, it is critical to thoroughly assess your financial situation. You should first take inventory of all of your income, assets, liabilities, and monthly expenses. This detailed analysis will allow you to create a realistic plan that meets your needs, as well as your legal requirements.

Prioritize Your Debts 

The debts you currently carry are usually categorized into three different types during Chapter 13 bankruptcy. In order of priority these are priority debts such as child support and tax debt, secured debts such as mortgages, and unsecured debts such as credit card debt. Your plan must prioritize paying priority debts in full. For example, if you carry tax debt and credit card debt, your repayment plan should first prioritize paying off your tax debt before addressing your credit card debt.

Determine the Length of Your Plan

 Again, Chapter 13 bankruptcy repayment plans can extend between three and five years. If your income is below Florida’s mean average, you qualify for a three-year plan. This is so you can repay your debts faster. Borrowers who have an income greater than the state’s average qualify for a five-year plan. Determining whether you qualify for a three or five year plan requires applying a test similar to the means test in Chapter 7. All borrowers qualify for a five-year plan, but there are advantages and drawbacks to choosing this type of plan.

Consult with a Chapter 13 Bankruptcy Lawyer in Orlando 

The best advice when creating a repayment plan is to consult with an Orlando Chapter 13 bankruptcy lawyer. At Anderson & Ferrin, our attorneys have the necessary experience to help you develop a plan that will repay your debt while still working for you. Our attorneys will also ensure that your plan meets the legal requirements and will be accepted by the bankruptcy courts. Call us now at 407-412-7041 or contact us online to schedule a free initial consultation with one of our seasoned attorneys and to learn more about how we can help with your plan.



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