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monro411
Posts: 382
Registered: ‎05-15-2007
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What percentage of secured debts usually have to be paid back in a bk13?

For instance say you are behind on your home by 8000 and have a vehicle that is 15k.  In you repayment plan, do you have to pay the entire 23k or is it a percentage. 
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oldhack62
Posts: 284
Registered: ‎12-14-2008
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Re: What percentage of secured debts usually have to be paid back in a bk13?

[ Edited ]

Any secured and priority (back taxes, government loans) debt included in your repayment plan will be paid back 100%. Unsecured debt will be paid back according to your remaining available disposable income -- which might pay 0% of that debt, or 100% of that debt. Some districts have a minimum 'dividend' to unsecured creditors, some don't. Where it exists, it generally is in the 10%-20% range. The percent payback really doesn't matter -- the entire debt is discharged as long as you've completed the plan as approved.

Message Edited by oldhack62 on 02-08-2010 10:15 AM
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txjohn
Posts: 4,214
Registered: ‎09-12-2008
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Re: What percentage of secured debts usually have to be paid back in a bk13?

Just to clarify previous post.

 

BK is not a percentage of debt.  It is based upon your ability to pay.  You will go through a "means test" to determine if you are BK 13 or 7 case.  If you have discretionary income after basics (shelter, food, utilities, etc.) then this estimated income is determined to make payments over 3 to 5 years.  Whatever it pays is all it pays...everything left is discharged.

 

I would like to correct previous post.  IRS tax liens and debts can be discharged through BK.  I know many people who have done so.  It will be almost always through BK 13 to require some payment, but this is not a percentage...it is based upon ability to pay.

 

In addition, the IRS will be considered "secured" by all non-exempt personal and real property and assets.  So if you owed $25,000 to the IRS and had $25,000 in assets (non-exempt) then they will be considered secured by those assets.  If you have more IRS debt than assets and income, then based upon the size of the debt and your income, a payment plan will be set up....unless the size of the debt is very substantial, in which case it can end up Chapter 7 on all amounts above the secured portion (the amount matched by assets).

 

 

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monro411
Posts: 382
Registered: ‎05-15-2007
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Re: What percentage of secured debts usually have to be paid back in a bk13?

So you are saying that right after the BK is discharged- they may (probably will) come after my car.  Then my woes will start all over again with a fresh repo on my credit report.   Secondly will they continue charging interest while I am in my BK.  With their interest rate, I will end up paying for 3 cars. 
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beamMEup
Posts: 4,473
Registered: ‎12-31-2008
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Re: What percentage of secured debts usually have to be paid back in a bk13?

In our Ch 13 BK, our auto loan was secured and was paid at 100%. 

 

It was actually paid off earlier than the original loan schedule because of the way the payment plan was structured in the BK.  We received the title to the car when we were still in BK.

 

Have you been able to visit with a BK attorney?  They will be able to answer questions specific to your case, and will alleviate a lot of your fears. It's a frustrating process to contemplate - a good attorney is actually pretty helpful in calming the spirits.  I think most BK attorneys will do a free or low cost consult????  At least, I think ours did.  Been a while, though.

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