Basics of the Repayment Plan for Chapter 13 in St. Charles, MO

Basics of the Repayment Plan for Chapter 13 in St. Charles, MO

With a Chapter 13 in St. Charles MO, a debtor must repay most of what they’ve borrowed. Any remaining debt is either discharged (eliminated) or repaid after the debtor’s assets are sold. For a person to repay debt, they and their attorney must suggest a repayment plan that must meet certain requirements before receiving court approval and, if it is successfully completed, the remainder of the client’s debts are discharged.

How Long Does a Chapter 13 Repayment Plan Last?

The repayment plan proposed by a client and their attorney from stevenbrownlaw.com must be of a specified duration. Chapter 13 plans are either three or five years long, but there are exceptions to the rule. The court may allow extra time if the debtor cannot complete the plan within the time allotted.

How Does the Client Know Whether They Get a Three-Year or Five-Year Plan?

The answer to this question depends on the results of the debtor’s means test. If the person passes the test, they can choose between Chapter 13 and Chapter 7. Those who choose Chapter 13 in St. Charles, MO, can choose between the three-year and five-year plans. However, a debtor who fails the test can only file for Chapter 13, meet one of the exceptions, or ask that the case is dismissed.

Plan Confirmation

The court will confirm a debtor’s repayment plan if it meets certain requirements, as shown below.

   *     The debtor must use all disposable income for the repayment plan.

   *     The plan must have a good chance of success. Most courts are fairly lenient, but the monthly payment should not exceed the debtor’s income.

   *     The plan must be offered in good faith, and it must work within the law.

If the Debtor Can’t Complete the Plan

Debtors encountering difficulty in paying off the plan have a few alternatives. Courts may dismiss the bankruptcy case, which is the worst possible outcome. Some cases are converted into Chapter 7, where the debtor may lose money and time, but the case may end more quickly. Plans can be modified in terms of time spent, payments owed, and creditor payment amounts.

Do Debtors Need an Attorney?

Filing for Chapter 13 can be complex, and creating a workable repayment plan can be challenging. A bankruptcy attorney with the Law Offices of Steven K. Brown can help clients put together a good plan, and they can provide legal representation in court.

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