What are your Chapter 13 debtor's obligations?

When you consider filing for bankruptcy in New Jersey under Chapter 13, you are taking a sensible step to relieve your burden of debt and make a fresh start financially. However, according to FindLaw, as a debtor, you have responsibilities to meet when you reorganize your debt with a Chapter 13 filing. If you fail to live up to the plan that you establish, the court may dismiss your case at any time. 

Perhaps the most obvious obligation you have under Chapter 13 is that you must repay your creditors. When you file Chapter 13, you and the court work together to formulate a plan to repay your outstanding debt over the course of three to five years. Within 30 days of filing for bankruptcy, you must begin making payments according to this plan. The court will assign a trustee to handle your bankruptcy and distribute the funds that you pay according to specific priorities. Unless your payments are automatically deducted from your payroll, your responsibility is to make payments to the trustee on either a monthly or bimonthly basis, depending on the terms of your repayment plan.

In addition to paying your debts, you also have a responsibility to pay an administrative fee and a filing fee. The court may dismiss your case if you fail to file these fees, but you have the option of paying them in up to four installments. If the court grants you an extension, you can make the last payment within 180 days of the date you filed for bankruptcy without penalty. Otherwise, the court must receive your last installment payment within 120 days of your bankruptcy filing date. 

There are forms required of those who file for bankruptcy, and all debtors who file Chapter 13 must submit forms relating to creditors, income sources, living expenses, property owned, the repayment plan and tax forms.

The information in this article is not intended as legal advice but provided for educational purposes only. 

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