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How can I make sure the Chapter 13 plan works?

Any bankruptcy proceeding in Texas will end up being a fruitless endeavor if it does not yield the desired result to the debtor and help him or her to get back on stronger financial ground. For a fresh financial start to be successful, the plan must work. With a Chapter 13 bankruptcy, it is vital to understand something that is elementary: how to make the plan work.

When the provisions of a confirmed Chapter 13 have been completed, it binds the debtor and the creditors. When the court has approved of the plan, it is up to the debtor for the plan to go as it is supposed to and be successful. For this to happen, the debtor must make the regular payments to the trustee. This can be done directly or via a payroll deduction. This requires the debtor to live on a fixed budget for an extended amount of time.

Although the plan being confirmed lets the debtor keep property provided the payments are made on time and in full, the debtor must remember that he or she is not allowed to accrue any new debt before discussing it with the trustee. This is due to additional debt having the potential to compromise the debtor being able to complete the plan as it was laid out. When making payments through payroll deductions, the benefit is that it raises the chance that the payments will be on time and the plan will be seen through to completion. If the debtor does not make the payments according to the plan, the court can dismiss the case or convert it to Chapter 7 and move forward with liquidation. There can also be a dismissal or conversion if the debtor does not pay domestic support as required or does not file taxes while the case is in progress.

It might seem simple to adhere to the plan and make it work, but there are certain things the debtor must do to complete the Chapter 13 bankruptcy. To ensure that the filing goes according to plan and is completed, it is wise to speak to an attorney who is experienced with all aspects of a Chapter 13.

Source: uscourts.gov, "Chapter 13 -- Bankruptcy Basics -- Making the Plan Work" accessed June 29, 2017

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