If you are struggling to pay your bills, it may make sense to file for Chapter 13 bankruptcy. Each month, you make payments to your creditors per the terms of a repayment plan that is submitted to a Tennessee judge as part of the bankruptcy petition process. Let’s take a closer look at what goes into such a plan and what else you can expect to happen at a confirmation hearing.
What must generally be included in a proposed repayment plan?
Your payment is determined based on your disposable income at the time you file for protection from creditors. This payment will be collected by the trustee and submitted to creditors on your behalf. Priority payments such as back taxes, child support or alimony payments must generally be made in full each month unless other arrangements are made. Secured creditors must receive an amount equal to the value of the collateral that they have an interest in.
What happens during a confirmation hearing?
A confirmation hearing will usually be held no more than 45 days after your Chapter 13 bankruptcy petition is received. The judge in your case will review the terms of your proposed plan to ensure that it conforms to applicable law. If creditors object to the plan, it may be rejected or amended to address their concerns. After the plan is approved, you are generally bound by its terms for the duration of the repayment period.
Filing for Chapter 13 bankruptcy may make it possible to reorganize debts without losing property. In some cases, it may allow you to get rid of negative equity in a vehicle or discharge other debts in a timely manner. Repayment plans typically last for either three or five years depending on your income.