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Chapter 13 question

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Kennyp217

Junior Member
What is the name of your state (only U.S. law)? Alabama
I'm planning on filing Chapter 13 soon due to the foreclosure on my house. I have a high interest personal loan original debt was $20000 and I currently owe around $13000. I've had this loan for over 3 years now and have already paid over $15000 on this loan most of that only being interest. Due to my income level I was told by a bankruptcy attorney 2 years ago I would have to repay 100%. My question is will I get credit for the $15000 I've already paid on this loan interest and all or will I still be stuck having to repay the $13000 still owed on the loan?
 
Due to my income level I was told by a bankruptcy attorney 2 years ago I would have to repay 100%. My question is will I get credit for the $15000 I've already paid on this loan interest and all or will I still be stuck having to repay the $13000 still owed on the loan?
You will pay whatever the "payoff" is as of your filing date (based upon the terms of your contract), assuming the creditor files a timely claim. If, on the day you file bk, the payoff is $13,000.00, that is what will be owed under the Plan (if the creditor files a timely claim). What you will not pay is the contract rate of interest going forward.

Some jurisdictions require payment of interest on unsecured claims in 100% repayment plans, but the interest rate is probably no greater than the federal rate in effect on the day the Chapter 13 Plan is confirmed. At the moment, the federal rate is very low.

Other jurisdictions (Arizona for example), interest is not paid to general unsecured creditors in 100% repayment Chapter 13s.

Ask a local attorney if interest must be paid to unsecured creditors in a 100% repayment Chapter 13 in your jurisdiction and, if so, at what rate.

Des.
 

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