Creating a Chapter 13 Payment Plan

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A Chapter 13 bankruptcy involves the repayment of the debts according to a payment plan. The payment plan is the most important aspect of a Chapter 13 bankruptcy.

Chapter 13

Chapter 13 bankruptcy is commonly known as the wage earner’s plan. If you have a regular source of income, you should consider filing for bankruptcy protection under Chapter 13. Individuals with a regular source of income or who are self employed or operate an unincorporated business can file for bankruptcy protection under Chapter 13. A Chapter 13 can be used to discharge consumer debts.

Payment Plan

Your payment plan must include all those debts which you are seeking to discharge. You can discharge all debts except statutory debts, court ordered payments and debts that generally survive a bankruptcy. If you have a debt which can be discharged by bankruptcy but if you do not include that debt in your payment plan, the debt will continue to be enforceable against you. Generally in a Chapter 13 payment plan, you can provide for payment of the debts in regular installments--weekly or monthly.

You must also provide a portion of your future income to meet your payment obligations under the plan. Your plan should provide for the payment of the debts within three years. However, in some case, you can submit a plan that provides for payment within five years.


Once you submit the plan to the bankruptcy court, the creditors will review the plan and can oppose the plan. You will have to deal with the objections of the creditors. Once you deal with the creditor’s objections, your payment plan must be approved by the bankruptcy court. Once your plan is approved, you must make the payments according to the plan. If you are unable to make payments according to the plan, you should immediately inform the trustee and seek extension of the payment period or lowering of your payment installments.

Getting Legal Help

Bankruptcy laws are complex. Hire an experienced bankruptcy attorney to help you create a Chapter 13 payment plan.