Alsip Bankruptcy Attorney Explains How A Chapter 13 Plan Payment Is ...

Your Chapter 13 plan is determined based on your income, your assets and your liabilities.  And it breaks it down by your debts and obligations in order to pay them off within five years.  Once the plan is filed, the creditors will file claims against your case and that will determine what your final debt is in relation to your Chapter 13 case.  Also, your Chapter 13 might require that you pay a larger percentage of your debt back which could alter your payment. 

Basically, the plan involves dividing your mortgage arrearage by 60 months, refinancing your car note into 60 months, and reducing your total unsecured debt to about 10% of its value and dividing it by 60.  Also, attorneys’ fees and interest payments to the trustee of about 5% will also be added into your Chapter 13 payment.  Once your plan payment is solid, your case can proceed for the next 36-60 months without interruption.  At the conclusion of your case, you will receive a discharge letter directly from the clerk of court.  If you are considering filing for Chapter 13, make sure that you meet with an attorney who practices bankruptcy law for a living.  There are some attorneys that dabble in bankruptcy who are not well versed in all of its nuances.