- A longer term
- A repayment plan
- The ability to change the terms of a loan
- Unsecured dividend
The primary reason people file for chapter 13 bankruptcy is because they are past-due on a secured debt. Often secured creditors will not negotiate an affordable repayment plan leaving the collateral in jeopardy. Creditors are not obligated to offer payment terms outside the promissory note. Chapter 13 bankruptcy laws can modify the note.
An over means debtor makes too much money to qualify for chapter 7, but is still eligible for chapter 13 bankruptcy relief. Unlike chapter 7, at the heart of each chapter 13 lies a repayment plan. This repayment plan is a contract between the debtors and their creditors. Each repayment plan is different, but for those debtors who are over means, it must include a dividend for general unsecured creditors like credit cards.
Chapter 13 Repayment Plan
Your chapter 13 bankruptcy plan is as unique as your financial situation. The three main parts of each chapter 13 plan in Massachusetts are:
- Duration from 36 to 60 months
- Creditors to be paid
- Payment terms
The key factors that will determine the specifics of your chapter 13 plan are:
- Your financial objectives
- Your cash flow
- Your attorney
In each chapter of bankruptcy our firm works closely with our clients to maximize the financial benefit.