Fort Worth Chapter 13 Bankruptcy Attorney

Repaying Debt in a 3-to-5-Year Plan

All income, expenses, creditors, assets, and other financial information are disclosed in your bankruptcy filing. Within 14 days of the filing, the debtor proposes a repayment plan to the court. Payments are typically paid biweekly or monthly.

The plan must pay priority debt in full unless the creditor agrees to a lesser amount. Priority claims include the following:

• Child support obligations
• Spousal support obligations
• Taxes owed to the government
• Injury or death claims caused by an alcohol or drug-related motor vehicle or boat accident

Unsecured nonpriority claims do not need to be paid in full if the creditor receives as much as they would have received if the debtor’s assets were liquidated under Chapter 7.

If the court does not confirm the proposed plan, the debtor may submit a modified plan for consideration. Whether the plan should be 3 or 5 years depends on the debtor’s monthly income and the time needed to pay the required amount. Those earning less than the state’s median income usually adhere to a 3-year plan. The plan will last 5 years if the debtor makes above the state’s median income.

There are situations where someone who qualifies for the 3-year plan would still choose a payment plan that lasts for five years. Our Fort Worth bankruptcy attorneys can evaluate what is best in your specific case.

Discharge in Chapter 13

The remaining balance of any qualifying debt is discharged – erased – after the successful completion of the repayment plan.

Nonpriority unsecured debts discharged under Chapter 13 include the following:

• Credit card balances
• Medical bills
• Personal loans
• Utility bills

If circumstances change leaving the debtor unable to complete the repayment plan, they can ask the court for a “hardship discharge.” This type of discharge is generally only approved if the circumstances are beyond the debtor’s control and through no fault of their own. This discharge is also only granted when the creditor has received as much as they would have in a Chapter 7 bankruptcy and modifying the plan is not possible.

Bankruptcy Does Not Define the Person

At the Law Offices of Mark M. Childress, we treat all our clients with respect and compassion. Being underwater financially is not where anyone wants to be. If you are being harassed by creditors, you do have rights. We will help you evaluate your options so you can make an informed decision about whether bankruptcy is the right solution.

Contact us today to discuss your bankruptcy options. Call (817) 497-8148 to schedule a consultation. We serve the counties of Tarrant, Parker, Johnson, Wise, Hood, Denton, Somervell, and Jack.