Vance P. Truman, Attorney at Law
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How is a Chapter 13 bankruptcy repayment plan set up?

Chapter 13 is the repayment type of bankruptcy. Individuals who file for this type of debt relief are generally able to hold on to their property after their bankruptcy is said and done. The reason that individuals who file for Chapter 13 can hold on to what they have is because they work with their creditors to come up with a repayment plan.

One of the first things that you'll be asked to do to determine whether you can enter into a repayment plan is to total up all your sources of income. This may include your job, disability payments, a pension, business earnings, unemployment or alimony. You'll need to figure in any wages from bonuses and seasonal jobs as well.

You'll also need to compile a listing of all of your necessary monthly expenses such as rent or mortgage payments and utilities.

The bankruptcy trustee will then take your expenses and deduct that amount from your earnings. What's leftover is referred to as your disposable income.

Your trustee will next request that your creditors file a Proof of Claim. This essentially lets the bankruptcy court know how much you owe.

Certain monies owed, which are known as priority debts, are those which must be paid before any others. Child or spousal support, outstanding wages you owe someone and taxes are just some examples of priority debts.

If you wish to hold on to your car or home, then you must have enough income necessary to do so. You must also be prepared to pay any creditors that you have unsecured debts with the same amount as the value of your nonexempt assets.

The bankruptcy court will generally give you between 36 and 60 months to make timely payments in alignment with your repayment plan. Any unsecured debt such as medical bills and credit cards that haven't been paid off fully at that point will be forgiven.

Filing for bankruptcy, whether it's Chapter 7, 11 or 13 requires the compilation of a lot of information and significant number crunching. Your eligibility to file for one of these types of debt relief is contingent upon the information that you place on these forms. An attorney in Medina can review your documentation and let you know what your prospects for successfully filing for bankruptcy in Ohio are.

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