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Which Debts Must Be Repaid After Filing for Chapter 13 Bankruptcy?

Which Debts Must Be Repaid After Filing for Chapter 13 Bankruptcy?

Filing for Chapter 13 bankruptcy in Ohio does not completely eliminate your debt responsibility. Instead, you must set up a repayment plan with the help of your attorney to pay back certain types of debts that cannot be discharged through the bankruptcy process.

Chapter 13 organizes debts into several categories: secured claims, unsecured priority claims and general unsecured claims.

Secured claims

Secured claims — those secured by collateral — are the largest category of Chapter 13 debts. You must pay back these debts in full, with interest. Here are some examples:

  • Mortgages: Mortgages are considered ongoing debts, which means you continue to make your monthly payments during the bankruptcy and continue to make those payments afterward. However, past due balances must be paid in full as part of your repayment plan.
  • Property tax: You must pay your entire past-due property tax balance with interest over the life of your repayment plan, with the interest rate depending on local guidelines.
  • Car loans: If the loan balance is due before the end of your repayment plan, you must pay the full balance over the life of your plan. The amount you pay depends on the current value of your motor vehicle and how recently you purchased it.

Unsecured priority claims

The federal Bankruptcy Code gives these claims priority, and you must repay them in full during the course of your repayment plan. Common examples include child support, certain income tax debts, alimony, and other support obligations, attorney’s fees, and Chapter 13 trustee fees.

General unsecured claims

These claims are not secured by collateral and are not prioritized. They include credit card debts, medical bills, personal loans, and utilities. Entities with general unsecured claims will get a percentage of the amount owed based on how much disposable income you have and the total value of your bankruptcy estate.

For more information and guidance on filing Chapter 13 bankruptcy, consult a dedicated bankruptcy lawyer in Dayton, Ohio with Fox & Associates Co., LPA.



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