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What debts have to be repaid in Chapter 13 bankruptcy?

Any debt can be stressful for a Tennessee resident, especially if they do not have the money to pay it off according to the terms of their loan. Whether that debt is the mortgage that they must pay for their house, an unpaid tax bill to the federal government, or an outstanding statement for their credit card, a debt can place a black cloud of worry over a person until they are able to pay it off and move their life forward.

While some individuals can handle their debts without legal intervention, others choose to file for Chapter 13 bankruptcy to reorganize their debts and create plans for repayment. Repayment plans are the heart of Chapter 13 bankruptcy filings and must be prepared by all individuals who use the process to remedy their debts. Not all debts must be specifically addressed in Chapter 13 repayment plans, and the status of a debt will determine its treatment during the process.

For example, priority debts must be specifically addressed in repayment plans. Priority debts include but are not limited to taxes and the costs associated with filing for bankruptcy. They are given special status under the law. If a debt is a secured debt, meaning it is attached to a particular piece of real or personal property, it also must be included in the repayment plan or the property must be given up to the lender whose loan secured it for the debtor.

Unsecured loans must be repaid with a debtor's disposable income, but generally these debts do not have to be specifically noted in Chapter 13 repayment plans.

As readers can tell, a lot of detail and planning must go into each and every Chapter 13 repayment plan that is created. It can be of great help to individuals to use the services of bankruptcy attorneys as they draft and submit these important plans to their bankruptcy courts.

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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