Christopher Todd
Morrison, P.C.

Christopher Todd Morrison, P.C.

Affordable Bankruptcy
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What are your obligations as a debtor under Chapter 13?

As a resident of Texas, filing for bankruptcy can free you of your burden of debt. Chapter 13 bankruptcy provides you with good options if you have the ability to reorganize and pay off your debts.

However, filing for Chapter 13 bankruptcy also comes with a set of obligations. What are they and how can you fulfill them?

File appropriate paperwork and pay fees

The United States Courts examines basics of Chapter 13 bankruptcy. This includes the obligations you face as a debtor. The first obligations are the same for anyone filing for any type of bankruptcy: you must file the proper paperwork and pay a filing fee.

You must file paperwork with your local bankruptcy court. This includes a list of creditors, all sources of income, living expenses and more. Other documents include a copy of your latest tax return, a Chapter 13 repayment plan and proof of tax filing for the last 4 years. You can pay fees in up to 4 installments.

Repay your creditors

Your main obligation is to repay creditors. Your plan will include 3 to 5 years of scheduled repayments. In the coming years, you must stick to it and repay your debts accordingly. Pay administrative fees in full, and then pay priority debts. This includes owed wages, alimony, child support and nondischargeable tax debt.

Next, pay secured current debts like mortgages as usual during the bankruptcy. Pay all other secured debts in full, including statutory liens and tax liens. Finally, pay unsecured creditors in an amount equal to your nonexempt property. Unsecured creditors include medical bills, back rent and credit card charges. You must stick to your plan and follow it through the lifespan of your bankruptcy.