Thx for the quick response. Here's where it gets a little tricky: Under his company reorg, he's made all payments, but appx $200K of the company debt is also secured by his Personal Guarantee. He makes a salary of about $100K per year and I would estimate that his business has about $250K in free and clear assets. He also has $250K equity in his house, but still owes $300K on it. Under a personal 13 filing is it likely that the court will (a)allow the $250K vendor debt to be reduced and (b) reduce any of the $200K in personal guarantees that he has via the business? His main priority is to keep his house, as he still has 2 children. Any help would be appreciated.
State/Country relating to question: Pennsylvania
Hi - (a) For the most part, you must pay 100% of your secured and priority debts (there are some exceptions where a "cram down" is available). This is not the case with nonpriority, unsecured debts. How much you must pay to your general unsecured creditors in Chapter 13 bankruptcy depends on several factors. The main factors are (1) Disposable income - You must devote all of your disposable income to your plan -- so what your unsecured creditors get depends on how much money you have left over each month after paying expenses, secured debts, and priority claims; (2) Best interest of the creditors. In addition, at a minimum, your unsecured creditors must get what they would have received had you filed for Chapter 7 bankruptcy. Thus, it is certainly possible to reduce this debt. (b). The same principles in (a) would apply. Repayment of unsecured depends on how much money you've got to pay.
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