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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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when one files for chapter 13, how does this work do es the

Resolved Question:

when one files for chapter 13, how does this work? do es the trustee settle a amount less then what you original owe, then I pay that over a course of 5 years? I filed chapter 7 but there was a loop hole so I must file chapter 13 I was told, can I settle with creditors but filing chapter 13?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,

When you file a Chapter 13 Bankruptcy, you have to pay all disposable income to the trustee for 3-5 years. (The length of time depends on your gross monthly income.) The disposable income is one's take-home pay minus allowable expenses.

At the end of the 3-5 years, any balance owed to the unsecured creditors is discharged.

 

I think this is what you wanted to know. If not, please let me know.
Thank you!

cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
So correct me, so if I owe 50000 I HAVE to repay this over 5 years all or a settle amount that the trustee agreed you must pay back? Can I negotiate now with creditors before switching from chapter 7 to 13?
Expert:  cfortunato replied 5 years ago.

When you are in a Bankruptcy - Chapter 7 or 13 - the trustee does not settle with creditors. The creditors have no choice, and have to accept what the trustee pays them, if they get anything at all. The amount that they get depends on how much money you make, and how much money you need to live on.

In a Chapter 7 debts are discharged right away, and in a Chapter 13 debts are discharged after 3-5 years.

Creditors are not allowed to negotiate with debtors while the debtor is in the midst of a Bankruptcy.

Customer: replied 5 years ago.
<p>Perhaps I am not making it clear or understand it, My attorney wants to call the creditors and try to settle with them before we transfer from chapter7 to chapter 13 and he says he wants 20% of what he settle for. is this right? I thought the the assingned trustee makes that decision? should i just wait for the trustee to do this or should my attorney go ahead and try this? I feel I am being ript off once again.</p>