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Debts to be Paid in Chapter 13 Bankruptcy

25th September 2014

What Must be Paid Back

With a Chapter 13 bankruptcy, some debts must be paid back. There are many types of debts, all of which will be handled in a unique manner under the bankruptcy code.

The three types of claims are as follows:

Secured claims (most common)
Unsecured claims
General unsecured claims

Since secured claims are the most common. Let’s take a closer look at how these are approached. The way you pay these claims depends on a variety of factors, including how long your repayment plan will last.

In short, a secured claim is associated with debt that is secured by collateral. This includes but is not limited to:

Mortgage
Car loan
Property taxes

Generally speaking, secured claims are required to be paid in full, along with interest, after filing for Chapter 13 bankruptcy. How much you pay in interest is based on the type of debt.

Note: if you are unable to repay all of the money owed during a typical repayment plan, you will not be required to pay off the entire amount.

Unsecured Priority Claims

These types of debts are easy to pinpoint as they are not secured by collateral. That being said, these claims take priority over other types of unsecured debts.

In most cases, these claims are required to be paid in full through your repayment plan. Some of the most common types of unsecured priority claims include:

Income tax debt
Past due alimony
Past due child support
Chapter 13 attorney and administrative fees and expenses

General Unsecured Claims

If a claim is not considered secured or priority it is categorized as “general unsecured.” The most common types of debt that fit into this category include:

Personal loans
Credit card debts
Utility bills
Medical bills

As you go into the Chapter 13 bankruptcy process, you want to know where you stand with each type of debt. This will give you a clear understanding of how much you have to repay through your plan.

If you are thinking about filing Chapter 13 bankruptcy and want to take a closer look at your debts, contact us to set up a consultation.

Written by David M. Offen Esq.

A native to the Philadelphia area, Mr. Offen attended Temple University College and Law School. Mr. Offen is licensed to practice in the States of Pennsylvania and New Jersey. He is a member of the Eastern District of Pennsylvania Bankruptcy Conference and the National Association of Consumer Bankruptcy Attorneys.