Unless brand new court offers an expansion, the brand new borrower need document a repayment plan to the petition otherwise inside 2 weeks pursuing the petition are registered. Given. R. Bankr. P. 3015. An agenda have to be filed for courtroom recognition and may offer getting costs out-of repaired amounts toward trustee for the a normal base, usually biweekly otherwise monthly. This new trustee upcoming directs the amount of money so you’re able to creditors depending on the terms of the plan, which could render creditors less than full payment on the claims.
Discover around three types of states: top priority, shielded, and you can unsecured. Priority states are the ones offered special standing of the case of bankruptcy law, including really fees in addition to will set you back away from case of bankruptcy. (3) Covered states are the ones for which this new collector provides the right restore particular property (we.age., brand new security) whether your borrower cannot afford the fundamental financial obligation. Compared to shielded states, unsecured says are often people in which the new creditor does not have any unique legal rights to collect against kind of property owned by the fresh new borrower.
Adopting the conference from creditors, the newest borrower, the chapter thirteen trustee, and the ones financial institutions who want to attend can come so you’re able to legal getting a paying attention with the debtor’s chapter 13 fees package
The master plan need to pay top priority states completely unless of course a certain concern creditor agrees to different treatments for the newest claim otherwise, in the case of a residential assistance obligation, unless of course the latest debtor contributes the “throwaway income” – talked about lower than – in order to a great five-seasons package.eleven You. § 1322(a).
Whether your debtor would like to contain the equity securing a specific allege, the master plan must provide that holder of your secure claim discover at the least the worth of the latest guarantee. If for example the responsibility underlying brand new shielded allege was used to invest in brand new equity (e.g., an auto loan), as well as the loans try obtain within particular go out structures before bankruptcy processing, the program should provide to own complete fee of debt, not merely the worth of the latest guarantee (and this can be quicker due to decline). Repayments to particular secure financial institutions (we.e., the home home loan company), are made-over the original financing fees plan (which can be more than the master plan) for as long as one arrearage consists inside plan. The newest borrower is to consult legal counsel to search for the medicine off protected claims about plan.
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The plan does not have to spend unsecured claims entirely for as long it provides that debtor pays all of the projected “disposable earnings” more than an enthusiastic “applicable partnership months,” so that as much time as unsecured loan providers discovered at the least as frequently within the bundle while they perform receive if your debtor’s 
possessions was in fact liquidated not as much as a bankruptcy proceeding. 11 You. § 1325. From inside the section thirteen, “throw away income” was income (except that kid support payments obtained from the debtor) faster numbers reasonably very important to the constant maintenance otherwise assistance of your own borrower otherwise dependents much less charity benefits up to 15% of the debtor’s revenues. When your debtor operates a business, the phrase throwaway earnings excludes the individuals quantity which can be needed to have typical operating costs. 11 U. § 1325(b)(2)(A) and you will (B). The newest “appropriate connection months” relies on new debtor’s latest month-to-month income. Brand new relevant connection months have to be three years if the newest monthly money was lower than the official median getting a household out of the same dimensions – and you will five years whether your newest month-to-month money is more than a family group of the same proportions. 11 You. § 1325(d). The plan may be less than the brand new applicable partnership several months (about three or 5 years) as long as consumer debt is paid in full more a shorter period.
