In Chapter 7 bankruptcy, the Chapter 7 bankruptcy trustee and United States Trustee have more control and authority over the process. In Chapter 13 bankruptcy, however, the journey can be much more complex and requires more time and effort from you. Because you play such a significant part in determining the results of your Chapter 13 case, working with a legal professional can guide your hand in a way that will give you a plan that you can benefit from as much as possible. Behm Law Group, Ltd. can provide you with expert legal counsel with the filing of a Chapter 13 bankruptcy petition in Jackson, MN.
One of the most important parts of your Chapter 13 case that you’ll play a part in deciding is your repayment plan. In the process of reorganizing your debts in a Chapter 13 repayment plan, you are required to propose a payment plan based on your income, your living expenses and the claims or debts/amounts you owe to your creditors.
Chapter 13 bankruptcy claims are essentially the amount of debt claimed to be owed by the debtor to the creditor. These claims can be made by a debtor and a creditor alike, and they are used to determine the amount to be repaid to each creditor during the repayment plan term. Debtors can file claims based on their own estimates of what they owe their creditors. Also, debtors can file claims on behalf of creditors if creditors either forget or refuse to do so. Creditors can also file claims to denote how much they were owed by the debtor when the bankruptcy case was filed. The Chapter 13 trustee pays creditors according to their claims. If creditors do not file claims, they don’t get paid anything by the trustee. When the claims of debtors and creditors differ, formal claim disputes can arise.
Creditor vs. Debtor
Claims of the creditor and the debtor may be in dispute. If a debtor doesn’t know the correct amount one owes to a creditor and then files a claim based upon only the debtor’s personal estimate, the impacted creditor can dispute that claim and change the outcome of a Chapter 13 repayment plan. A creditor can file its own claim which could be significantly higher than the debtor’s estimate. In such a case, that creditor would receive a larger payment every month from the Chapter 13 trustee. Similarly, a debtor can dispute a claim a creditor makes if a debtor has viable proof of inaccuracy. When disputes are settled, a final plan is established. However, the plan may be further altered if the bankruptcy trustee appointed to administer the case doesn’t agree with the repayment structure. For instance, the trustee may think that the chapter 13 plan does not pay a sufficient dividend to one’s unsecured creditors. Further, the trustee may disagree with the amounts of the monthly expenses claimed by a debtor. The trustee may also believe that a debtor’s income has been understated. The trustee can petition the bankruptcy court to alter the terms of your chapter 13 plan and the trustee could request that the payment amount be increased. If a debtor and the trustee disagree about the payments or other terms of a debtor’s chapter 13 plan, the matter is submitted to the bankruptcy court for determination via a contested confirmation hearing.
If you plan to file for Chapter 13 bankruptcy, taking advantage of the help of an expert bankruptcy attorney can change the outcome of your repayment plan. For more information about how Chapter 13 works, or for legal advice and assistance with your petition for bankruptcy in Jackson, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.