In my last blog I discussed your Chapter 13 Bankruptcy Petition Signing. Also at that appointment we will go over your Chapter 13 Bankruptcy Plan which will be filed with the Court along with your Petition. This blog will give you a general overview of a typical Chapter 13 Bankruptcy Plan (hereinafter referred to as “the Plan”) in Connecticut.
The first section of the Plan will state the portion of your future income that you will submit to the Chapter 13 Trustee each month to execute the Plan. This section also states “the applicable commitment period” or, in other words, how many months the Plan will be for (Plans can be for 3 or 5 years (36 or 60 months)). The amount of time required depends on the amount of disposable income you have, along with other factors. The usual Plan will take 5 years to complete.
Your first payment must be made to the Chapter 13 Trustee within 30 days after filing of the Plan. Failure to do so may result in the dismissal of your case. The Chapter 13 Trustee usually requires the payments be made by wage garnishment (attaching your pay) after the Plan is confirmed. Until then, you must mail the payments to the Chapter 13 Trustee. I will provide you with the address and specific instructions when the time comes.
The first section of the Plan will also list any domestic support obligations you may have.
The second section of the Plan will explain the disbursements that will be made by the Chapter 13 Trustee from the payments that you make. The first set of disbursements are for Priority Claims (such as taxes and government student loans), if any. Followed by Secured Claims (such as mortgages and car loans), if any. However, these debts are ordinarily paid outside of the Plan by you directly to the Creditor(s).
The last set of disbursements listed in the second section of the Plan will be for your unsecured debt. This is done by listing the total of all general unsecured claims.
The next few sections of the Plan will list your executory contacts (unperformed contacts), if any, and give “other” terms of the Plan, which is a catchall for terms that do not neatly fit in to any other section.
In the last section of the Plan it will state my attorney’s fees for representing you and whether they are to be paid inside or outside of the Plan.
This will be followed by a signature block for you and me to sign. The Plan will state that all questions regarding the Plan will be directed to my office.
Remember, this Plan is subject to change upon examination of the Chapter 13 Trustee and is not final until the Order of the Court after your Confirmation Hearing. Your Confirmation Hearing will be explained in a later blog within this Chapter 13 Blog Series.
Contact Attorney Theresa Rose DeGray at 203-713-8877 with any questions you may have and stay tuned for our next blog entry in this Chapter 13 Series which will explain just who and what the Chapter 13 Trustee is and why the Trustee plays such a vital role in your Chapter 13 Bankruptcy.