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Bankruptcy

Chapter 13 bankruptcy—repayment plan

Unless the court grants an extension, the debtor must file a repayment plan with the petition or within 14 days after the petition is filed. A plan must be submitted for court approval and must provide for payments of fixed amounts to the trustee on a regular basis, typically biweekly or monthly. The trustee then distributes the funds to creditors according to the terms of the plan, which may offer creditors less than full payment on their claims.

In Illinois, as in other states, when an individual files for Chapter 13 bankruptcy, they are required to submit a repayment plan either with their petition or within 14 days after the petition is filed, unless the court allows an extension. This plan outlines how the debtor intends to pay off their debts over a three to five-year period. The repayment plan must be approved by the court to ensure it meets the necessary legal requirements and is fair to all parties involved. Once approved, the debtor makes regular payments, usually biweekly or monthly, to a court-appointed trustee. The trustee then distributes these payments to the creditors as outlined in the plan. It's important to note that the repayment plan may propose to pay creditors less than the full amount owed. The specifics of the plan will depend on the debtor's income, debts, and other financial circumstances.

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Bankruptcy

Chapter 13 bankruptcy—repayment plan

Individual & Family Legal Plan

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Illinois State Code

Illinois State Code

Bankruptcy

Chapter 13 bankruptcy—repayment plan

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