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Paul K, Esq.
Paul K, Esq., Attorney
Category: Bankruptcy Law
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Experience:  10 years Exp., Great customer service, Prompt responses.
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I understand that general unsecured non-priority creditors

Resolved Question:

I understand that general unsecured non-priority creditors receive no interest for their claims in a Chapter 13 plan. But how is the interest rate determined for creditors who do get paid interest in the plan? In particular - a mortgage arrearage, a car payment on which the debtor is current at the time of the Chapter 13 filing, and federal income back taxes (that qualify as a non-priority claim). Also, the balance on the car note would have been paid within a year. However under the Chapter 13 plan, the debtor will stretch the pay off over 5 years. In these scenarios, would the debtor pay an interest rate determined by law, could he negotiate a lower interest rate, or would he have to pay the interest rate agreed to in the original contract with the creditor?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Paul K, Esq. replied 1 year ago.

Paul K, Esq. : Hello, my name is XXXXX XXXXX X would love to assist you. Give me a moment to research your issue and I will answer promptly.
Paul K, Esq. : Thanks for the questions.
Paul K, Esq. : There is alot here, so let me try to answer them one by one.
Paul K, Esq. : 1) Most districts have no interest on mortgage arrears in the plan, which is a huge benefit to a Ch 13.
Paul K, Esq. : 2) Car payment interest is usually able to be reduced to what is called the Till rate, or approximately 4-7%. So if you have a 19% interest rate, it can be lowered in the Plan.
Paul K, Esq. : 3) If the taxes are non-priority, there is no interest that I know of, as it is an unsecured general claim.
Paul K, Esq. : 4) You dont have to stretch the car payment if you dont want. I regularly set the payment on the car for 2-3 years.
Paul K, Esq. : I think that is all your questions, so if you have any other please let me know!
Paul K, Esq. : I will be on a bit tonight and most of the day tomorrow, so please allow me time to get back to you if you have more questions.
Paul K, Esq. : I look forward to helping you in this matter and I wish you luck.
Paul K, Esq. : Have a great night!!!!
Paul K, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 141
Experience: 10 years Exp., Great customer service, Prompt responses.
Paul K, Esq. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you for the quick response. Where could I find the Till rate for Minnesota and whether Minnesota law requires interest on mortgage arrears?

Expert:  Paul K, Esq. replied 1 year ago.
4.5% looks like what courts are using there. Also, if your car was purchased over 2.5 years ago, you only have to pay what car is worth, not what you owe. LAstly, it appears there is no interest on mortgage arrears in MN.

Have a good day!!!
Paul K, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 141
Experience: 10 years Exp., Great customer service, Prompt responses.
Paul K, Esq. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.

Where did you find this info?

Expert:  Paul K, Esq. replied 1 year ago.
I used a contact in MN - Here is their website - http://www.friedmaniverson.com/blog/tag/till-rate/
Paul K, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 141
Experience: 10 years Exp., Great customer service, Prompt responses.
Paul K, Esq. and other Bankruptcy Law Specialists are ready to help you

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