One of your duties as part of filing for Chapter 13 bankruptcy is to prepare a repayment plan to cover claims by your creditors. Not all debts will be treated the same, though. As the U.S. Courts website explains, some debts fall under the secured debt category, which are backed by collateral. There are also unsecured debts that may end up being partially paid. The most pressing debts for a New Jersey bankruptcy filer, however, are priority debts.
Bankruptcy law will declare particular debts to be priority debts, meaning these are claims that must be completely paid. Any repayment plan will have to prioritize these payments to have a chance of being approved. However, there may be room for flexibility in how these payments are made. A bankruptcy filer can still negotiate with priority creditors for different payment terms.
According to Findlaw, there are a number of payments that qualify as priority debts. Alimony payments and child support must be paid off. You also cannot use bankruptcy to discharge your tax obligations, so back taxes are sure to be included. Additionally, if you own a business, monetary obligations to employees are also considered priority debts. These include salaries, commissions and wages you owe to employees, as well as anything you might owe to an employee benefit plan.
Preparing a plan that prioritizes mandatory debts is just one step to making sure you qualify for Chapter 13 bankruptcy. You must also follow through with these payments, or your bankruptcy will be revoked by the court. However, in the event sudden life changing events make paying priority debts at the agreed intervals difficult, you can ask the court to modify your initial payment plan.