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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 19470
Experience:  B.A.; M.B.A.; J.D.
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My name is ************, I'm a 29 year old full time

Customer Question

My name is ************, I'm a 29 year old full time bankruptcy claims investor in CT. Im self taught and have begun to explore another avenue in other purchases in chapter 7 & 13 there are a couple details that are unclear in my researches with document filing and docket entries. I have LexisNexus, TLOxp and electronic filing access through Pacer where I gather information and risk assessments.
Most of my questions are based off of Chapter 13, but some can also be applied to 7.
For example 3 secured, 3 unsecured creditors:
In a 13 when a payment plan has been approved, and the debtor has a $1000 a month payment for 60 months, when the trustee disperses the funds, will secured claimant in priority position receive the $1000 until their claim is satisfied? or is the $1000 spread evenly across all 6 creditors?
The reasoning for my questioning is i will be dealing with consumer 7s & 13s with low claim amounts until i get a handle on the process and risk for this type of purchase. Obviously the math has to work in favor of covering all claims after liquidation or priority. I need clarity on how the funds are dispersed to the claimants from the trustee.
The larger firms that work in larger cases have a calculation on this math and also timelines on dispersement, if you can put me in the right direction i would be grateful.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 1 year ago.

The Secured creditors with priority would be paid first.

How payments are made to the creditors are dictated by the Chapter 13 plan. Not all creditors are equal. Secured creditors are treated differently from unsecured creditors. Claims with priority are treated differently from claims without priority. In any event, payments are made pursuant to the terms of the plan. So, you would need to review each Chapter 13 plan to see how the creditors are going to be treated.

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Customer: replied 1 year ago.
it's likely to say that a 7 would be handled the same after liquidation and distribution terms are outlined in the agreements as well?
Expert:  Phillips Esq. replied 1 year ago.