It is often the case that when a Georgia resident cannot get ahead of their overwhelming debts that they may turn to bankruptcy as a means of getting themselves back on the right financial path. There are two main forms of bankruptcy that individuals generally decide between when their debts are the result of personal financial management – Chapter 7 and Chapter 13 – and this post will focus on one of the most significant components of one of those processes.
In Chapter 13 bankruptcy a person is asked to create a repayment plan. On its face a repayment plan is exactly what it sounds like. It is a schedule of when and how much money a debtor will be able to provide to their creditors over time so that they may eventually satisfy their obligations.
However, there is much more to a repayment plan than just that. For example, within a repayment plan a debtor must identify and prioritize certain creditors over others. Priority claims must be paid off first, and secured claims must be given status of repayment over unsecured claims. In order to use Chapter 13 bankruptcy and its repayment plan structure to get out of debt a person must have sufficient disposable income to stick to the plan that they have created.
Individual repayment plans under Chapter 13 bankruptcy can take on different forms depending upon the debts a person holds and the income that they are able to dedicate to repayment. Bankruptcy lawyers can help their clients prepare and submit repayment plans that address their financial liabilities and support their efforts to become debt free.
