Repaying Unsecured Debt in Chapter 13 Bankruptcy
The Chapter 13 bankruptcy process is complex, and is intended to help individuals pay back as much of their debt as is possible with their available disposable income. This is achieved through a set of priorities where major unsecured debts such as taxes, a mortgage, and car payments are paid first, followed by the rest of your debt where possible.
One of the most desirable attributes about Chapter 13 bankruptcy is that in some instances you may not be required to pay back the entirety of your unsecured debts such as credit card payments. While a creditor must receive at least as much as they would in a Chapter 7 filing, the amount beyond that which they can recover is determined by your repayment plan. If you are considering filing for bankruptcy and would like to know more about what sort of repayment plan you could arrange, contact a Houston Chapter 13 bankruptcy lawyer from the Russell Van Beustring P.C. today by calling 713-973-6650.
The key factor in constructing a Chapter 13 repayment plan is the amount of disposable income you have. Once you deduct your basic living expenses, the entire remainder of your income is usually required to be applied to your debts. The amount of your unsecured debt that will be recovered by creditors depends on the following factors:
- Your total disposable income after priority debts are accounted for
- The value of your property not exempted by bankruptcy law
- The length of your repayment plan
Depending on your particular situation, you may be required to pay anywhere between 0% and 100% of your unsecured debts, and a skilled attorney may be able to help to keep that percentage as low as possible.
If you are undergoing serious financial strain and looking to bankruptcy as a way out, an experienced Houston bankruptcy attorney can help. Call the Russell Van Beustring P.C. today at 713-973-6650 to learn more about your legal options.