New Chapter 13 Bankruptcy Loan Terms

Debtors may file full or partial plans. In a full plan, all debts are repaid in full, with interest. In a partial plan, the term may last only so long as required to repay debts, and thereafter the case is closed. The effect of variations in the length of plans has little impact on the overall effect of filing when applying for future loans, credit, and insurance premiums.

Debtors may also file partial plans that provide for less than full repayment. In a partial plan, the debtor pays all disposable income into the plan for a period of 3 to 5 years. At the end of the plan, Chapter 13 bankruptcy loan discharge is available for all remaining balances. A Chapter 13 discharge wipes out liability for future payments on unpaid portions of debts. The amount of the minimum monthly payment in partial plans was contribute of a debtor's disposable income for the benefit of creditors.