Norridge Bankruptcy Attorney States All Debt Does Not Have To Be Paid Back

All debts do not have to be paid in full in a Chapter 13 bankruptcy case according to Norridge bankruptcy attorney.  The reason for this is that you have general unsecured creditors which only have to be paid back the same percentage that they would receive if you filed a Chapter 7 liquidation case.  For that reason, most often general unsecured creditors can be paid less than 100%, typically as low as 10%. Secured creditors such as mortgage arrears and vehicle deck must be paid in full through a Chapter 13 otherwise you are not going to successfully reinstate your mortgage or acquire your car title. 

If you have a debt with a co-debtor, you can pay that debt less than 100%, however the creditor will be able to pursue the co-debtor for the amount that you are not paying them.  Thus in most cases where you have a cosigner, you can propose to pay that individual creditor back 100% to protect the co debtor. 

If you are not going to receive a discharge in a Chapter 13 bankruptcy case, then you can decide to pay back anywhere from 10% to 100%.  Just know that if you are not paying 100% back in a no discharge Chapter 13 bankruptcy case, that you are going to owe the remainder of the debt after your case has gone through to completion.  For many people, paying 10% back on non-dischargeable debt and not receiving a discharge is good enough for them.  It effectively holds the creditors off for 36 to 60 months and pays them back a little bit over time, obviously less than 100%.  At the end of the five-year period, the debtor may be in a better position to work out a deal with those creditors or the debtor might be in a position to refile another 13, pay another 10% back and hold the creditors off for another 3 to 5 years.  Each case is different so please consult with your local bankruptcy attorney who handles Chapter 13 cases to discuss your particular fact situation.



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