Chapter 13 bankruptcy payments

As you know in Chapter 13 bankruptcy you make a payment plan that is approved by the bankruptcy court and you continue to pay your debts for a 3 to 5 years period(check this chapter 13 bankruptcy timeline). Here are some explanations regarding chapter 13 bankruptcy payments.

The person that starts the bankruptcy process must make regular payments to the appointed trustee. The payment is made according to the chapter 13 bankruptcy payment plan and the money can be handled directly to the trustee or through a payroll deduction.

As long as the debtor respect the payment plan he is allowed to keep his property but is not allowed to contract new debts without consulting the trustee (this is applicable only through the bankruptcy process).

There are very big chances that the debtor will make the payments though payroll deductions. This practice ensures the trustee that payments will be made on time and that the debtor will complete the plan.

If the debtor misses a single payment from the Chapter 13 bankruptcy payments plan the court may dismiss the case or convert it into a Chapter 7 one. Also the court may dismiss the case if the debtor doesn’t make the payments for taxes or domestic support obligations like alimony or child support.

What you need to remember regarding Chapter 13 bankruptcy payments:

1. You have to make every payment and you have to be on time
2. You will continue to make regular payments for a 3 to 5 years period.(the period will be established by the bankruptcy court).
3. You receive the discharge only after you made all the payments
4. If you miss one payment you case can be dismissed
5. Debts like mortgagees, taxes, alimony or child support need to be paid in full.