How to Fill Out a Chapter 13 Plan

When filing for Chapter 13 bankruptcy, it is necessary to create a repayment plan. Chapter 13 allows debtors to repay creditors in a court-approved repayment plan. A Chapter 13 repayment plan allows a debtor to repay certain debts over time, including priority debts, secured debts, tax payments, arrearages (past due amount owed on secured debt), and trustee and lawyer fees. Depending on a debtor’s income, a debtor must repay creditors in a three- or five-year plan. Plan forms differ for each court, but the following provides a general guideline for how to fill out a Chapter 13 plan.

Things You'll Need

• Form from your local bankruptcy court
• Record of income
• Calculation of expenses
• List of debts

Instructions

1. Calculate the amount of disposable income you will pay to nonpriority unsecured creditors. Disposable income is the amount a debtor has left over after paying reasonably necessary expenses, installment payments on debt secured by collateral, priority debts, past due payments on secured debt, and liens.

2. Classify debt according to how the bankruptcy court will treat the claim. In the appropriate sections, list unsecured priority debt, claims secured by real property, secured debt that exceeds the value of the collateral, arrearages, and nonpriority unsecured claims. Provide the name of the creditor, the last four digits of the account, the interest rate, the amount of the claim, the monthly payment, the number of months the creditor will be paid in the plan, and the total amount paid at the end of the plan.

3. Decide whether to pay your mortgage through the plan or directly to the creditor. Because the administrative fee paid to the trustee is a percentage of the total amount of the monthly payment, choosing to pay the mortgage in the plan will cause the debtor to pay more over the life of the plan.

4. Provide secured creditors with adequate protection payments if required. Because bankruptcy is a lengthy process, some secured creditors may require a debtor to agree to pre-confirmation payments in order to protect their interest in the property.

5. Summarize the payments for each class of debt. Do not include payments that you will make to creditors outside of the plan. Include the trustee’s fee, which is usually 10% of the total payments, in the summary.

6. Create an order of payment for the trustee to follow when disbursing payments to creditors. A typical order requires the trustee to pay creditors in the following sequence each month: trustee fee, domestic support orders, administrative fees, payments to secured creditors made through the plan, a pro rata amount for other claims, and unsecured debt.

7. Decide whether you want to surrender personal or real property to the creditor. A debtor making payments to a creditor may choose to give back the property instead of including it in a Chapter 13 plan. List the property and the creditor in this section.

References

• Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time; Stephen Elias & Robin Leonard; 2008