The repayment structure that is the most distinguishing feature of Chapter 13 bankruptcy is often referred to as a wage earner's plan. Under Chapter 13 bankruptcy law, individuals and couples who have the necessary resources to make payments, usually at reduced amounts, can ask the court to grant relief. If the court accepts the petitioner's request, the judge will ask them to produce a repayment plan that must fit within a timeframe of between three and five years.
Obviously, there are other requirements. Let's take a look at four of the biggest things you will need to include in your plan.
Proof of Income
No court wants to end up revisiting a bankruptcy case under worse circumstances. If your finances aren't good enough for Chapter 13 bankruptcy, the court will compel you to face facts. This is accomplished by requiring proof of income. You'll have to show the court that your income is sufficient to make paying possible.
Likewise, the court will want to know that you need to file. Income reporting also discourages parties from filing to reduce their debts when they could pay.
Bills, Bills, Bills
Generally, the court will want all of your disposable income directed toward paying down debts. This means you'll have to present what your bills and living expenses are. If there are doubts about whether an expense is necessary, the court or your creditors can raise concerns. You may then have to further document why you're paying what you're paying and if it is truly essential.
Note that you might not get to claim the full amount of a bill. For example, claims for utility bills are usually based on a flat amount that's produced in a rate schedule from the IRS. Local standards may also be used to judge transportation expenses. National standards are used for food, clothing, and out-of-pocket medical expenses.
List of Creditors
It's critical to include the names of all your creditors in your petition. Any creditor that's left out will have a legal justification to continue collection actions against you. It's best to contact your creditors and confirm what their companies' full legal names are and any mailing addresses they might use.
A list of assets that are non-exempt in Chapter 7 must be included with a Chapter 13 bankruptcy. Whatever payment amount you arrive at in Chapter 13 must be at least equal to the total value of your non-exempt assets.
To learn more about Chapter 13 bankruptcy, reach out to a company like C. Taylor Crockett, P.C.