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Do I Have to Pay All My Debts in a Chapter 13 Bankruptcy?

Some individuals are disappointed when they find out that they only qualify for a Chapter 13 bankruptcy. Technically the Chapter 13 bankruptcy is a repayment plan. This means that many of your creditors are going to have to be paid. While this may seem disappointing to you, you will probably soon find that it turns 

Some individuals are disappointed when they find out that they only qualify for a Chapter 13 bankruptcy. Technically the Chapter 13 bankruptcy is a repayment plan. This means that many of your creditors are going to have to be paid. While this may seem disappointing to you, you will probably soon find that it turns out to be a great option for you as the repayment plan will make it easier for you to pay your debts without the hassles of the creditors. There may be some debts that you will not be able to handle in your repayment plan.

Your secured debts will be the ones that are focused on the most, and it will have to be determined how long the payments that you would have to make will last. These secured debts are important because you have some type of collateral that you have put up for them and if the debt is not paid then the creditor could take that collateral. If you want to keep this item when you are filing for your Chapter 13 bankruptcy then arrangements have to be made to pay the loan. Usually it turns out that these secured debts have to be paid in full including the interest. The amount of interest will depend on the debt itself. There is a procedure that is called a cram down which can help to give some relief towards a secured debt.

Mortgages are considered secured debt but quite often they do not have to be paid in full during the Chapter 13 bankruptcy. These are considered to be an ongoing debt which means that they will still be existing even after the Indiana bankruptcy is concluded. What will be focused on here is any past due amounts. This just gives an example of how some of the debt is handled in the chapter 13 bankruptcy.

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