A Chapter 13 bankruptcy payment plan allows individuals with regular income to develop a strategy to repay part or all of their debt, usually in the form of a proposed payment plan. Since a Chapter 13 bankruptcy is designed to cater to individuals with a “regular” source of income, you have to indicate to the Court how you will be able pay back creditors with future income.
Requirements Of The New York Chapter 13 bankruptcy payment plan:
- How much of funds you have available to repay creditors after basic monthly expenses have been paid. It must also show how any left over funds will be split among your creditors.
- It must be delivered in good faith.
- Unsecured debtors must be paid, at the very least, just as much under a Chapter 7 bankruptcy filing.
- It must also indicate that all disposable income will be paid into the plan.
Once you have filed for a New York Chapter 13 bankruptcy, the payment plan must be adhered to. After you or your attorney make arrangements with the court, the New York Chapter 13 bankruptcy payment plan installments are usually withdrawn directly from your wages.
After filing for a New York Chapter 13 bankruptcy plan, you have to attend a hearing before a bankruptcy judge. The judge will either confirm or deny the Chapter 13 bankruptcy payment plan. If your Chapter 13 bankruptcy payment plan is confirmed and adhered to, you will be released from any outstanding balances on dischargeable debt at the end of your term – typically between 3 to 5 years. If your income level is surpasses the average median income for your household size for New York, the duration of your plan will be five years. If you earn below the median income, you can propose a 3 year repayment plan to the Court, even though all of your unsecured creditors may not be repaid in full at the end of the three years.It is important to make on-time and full payments towards your New York Chapter 13 bankruptcy plan. Defaulting on your New York Chapter 13 bankruptcy plan may result in your case being dismissed.