Search Site
Menu
How Much Must Creditors Be Repaid in a Chapter 13 Plan in Georgia?

 

How Much Must Creditors Be Repaid in a Chapter 13 Plan in Georgia?

Chapter 13, also known as a “wage earner’s plan,” is a popular alternative to traditional bankruptcy for people who simply need breathing room to deal with crushing debt. Chapter 13 bankruptcy allows debtors to keep their possessions and pay back creditors a percentage of their arrearages over a period of three to five years. What’s more, once the repayment plan is completed, the balance of the debt is wiped out.

How Much Must You Repay to Creditors in a Chapter 13 Plan in Georgia?

In Georgia, Chapter 13 filers will be be required to pay back priority debts and secured debts in full. A formula is then used to determine the amount available to remaining creditors. The calculation includes a combination of debt, saleable assets and income over the period of the bankruptcy.

As good as thHow Much Must Creditors Be Repaid in a Chapter 13 Plan in Georgia?at sounds, Chapter 13 isn’t for everyone. To qualify, you must be able to demonstrate that you have steady sources of income, including wages and other forms of compensation like pensions or annuities. In addition, your income must exceed your recurring expenses so as to create a sufficient amount of disposable monthly income to make payments to creditors.

Debts You Must Pay in Full

A Chapter 13 repayment plan sets terms for who will be paid back, how much they will receive and when the payments will be made. Certain past-due debts — known as priority debts — are required to be paid in full. These include child support, spousal support, certain income taxes and wages due to workers. In addition, past-due secured debts — those attached to specific assets like real estate and automobiles — must be paid in full if you wish to keep the underlying assets. Finally, the repayment plan factors in the value of any assets would not be exempt — meaning those that could be liquidated — if you were filing a Chapter 7 bankruptcy.

How to Calculate a Chapter 13 Monthly Payment

Adding up your disposable income, priority debts, secured debts and nonexempt assets produces the total amount that can be devoted to paying off creditors. Added to that total is the administrative fee — usually about 7 percent — that is payable to the bankruptcy trustee and attorney fees. The result is then divided by the number of months the plan will be in effect — for example, 60 months for a five-year plan — to calculate your monthly payment.

A Chapter 13 will be to your advantage only if your priority and secured debts are low enough to keep your monthly payout less than your monthly disposable income. Otherwise, you may have to relinquish secured assets or opt for Chapter 7 bankruptcy instead.

At Jeff Field & Associates, we can help you determine whether Chapter 13 is appropriate in your situation. We maintain offices in Scottdale, Marietta, Athens, Gainesville, Lawrenceville and Douglasville, Georgia. To schedule a free initial consultation with a legal professional, call 404-381-1278 or contact us online.

Leave a Reply

Your email address will not be published. Required fields are marked *

Videos
Our Attorneys
Client Reviews
  • google
    5.0/5.0

    This was a hard thing to do but Chris made it easy and explained everything in a way I understood the process. I would recommend anyone having to go through this to contact this office! Casey was great as well and the communication kept the whole tim...

    Read more

    Beth Carlin

  • google
    5.0/5.0

    The staff made a very stressful situation much easier to cope with. They treated me with kindness and respect. Chris and Laura are very professional and knowledgeable.

    Read more

    Anita York

  • lawyers
    5.0/5.0

    The Entire team at Jeff Field and Associates were so helpful throughout the entire process. They were quick with responses and handled everything. They dont make you feel bad about your decision, and provide very helpful advice. Mr. Fields was always...

    Read more

    Client

  • google
    5.0/5.0

    We started our process in October 2021, the process was fast and easy. Casey Brown was there to answer questions via email expeditiously. In 3 months our case was discharged and we are extremely thankful and excited for the future. This truly was a...

    Read more

    Joan Bunting

  • lawyers
    5.0/5.0

    I enjoyed working with Jeff and his team. They were always there to help and answer any questions that I had in a timely manner. I highly recommend Jeff Fields and Associates.

    Read more

    Client

See all reviews
Contact us

Please fill out the form below and one of our attorneys will contact you.

Quick Contact Form