What is chapter 13 bankruptcy electric utility companies in florida

The Chapter 13 plan, or simply the payment plan, is the heart of a Chapter 13 case. Chapter 13 is an attempt to "reorganize" a your debt over time. It’s a great tool for the debtor who is behind in house payments or car payments. Those payments can be caught up with the payment plan over time, thereby saving the house from foreclosure or the car from repossession. The plan will also include any past due priority claims, like alimony, child support, or recent income taxes.

The Chapter 13 plan can also include payments to unsecured creditors like credit cards and medical bills. A calculation is applied to your income and expenses to determine if you have any disposable income after all your other obligations are met. You’re expected to devote your disposable income to your plan payment, and that extra money will be used to pay unsecured creditors like those credit cards and medical bills. If you have no disposable income, that’s okay The debts will still be discharged because you’ve devoted your best effort to paying your bills through Chapter 13. Plan Requirements

First, the plan must be proposed in good faith. This means, essentially, that you intend to completely follow through on the plan and is are attempting to misrepresent your finances or perpetrate a fraud on the court. The plan must also meet the "best interest of creditors" test. This test requires that the Chapter 13 plan must pay unsecured creditors at least what they would have had under a Chapter 7 bankruptcy. In many cases, the unsecured creditors would have received nothing in Chapter 7, so this test can often be easily met. The other test is called the "best efforts" test. The best efforts test requires that the Chapter 13 plan pay unsecured creditors a certain amount multiplied by the debtor’s disposable income. Chapter 13 Trustee

The trustee will review the proposed payment plan and has the authority to challenge the plan in bankruptcy court if he or she believes that it is improper. If the Chapter 13 plan is confirmed by the bankruptcy court, the trustee acts as an intermediary between the debtor and creditors receiving payments. Specifically, the debtor makes payments each month to the trustee. The trustee then divides up the payment, as established in the Chapter 13 plan, and issues payments to the creditors. Restrictions During Chapter 13 Bankruptcy

Chapter 13 bankruptcy carries with it a few restrictions which are not present in Chapter 7 bankruptcy, the monthly plan payment being the most obvious. In addition, you will not be allowed to incur any more debt, like a car loan, without court approval. You must also maintain insurance on any collateral, like collateral for a car loan. Discharge

Similar to a Chapter 7 bankruptcy, at the end of the plan, most or all of your debts will be discharged. You may be left with debts that are not discharged, like student loans. As in Chapter 7, the Chapter 13 discharge is personal, meaning that if there is someone who is also obligated on one of the discharged debts, he or she is still liable for the debt.