I was reading the Indiana government site regarding Chapter 13, and it said only 35% of original participants ever complete their plan. Why? Is there something I am missing? What happens if you don't finish the plan?
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Pre-10/17, ch 13 payment plans were set up with rather high payments for several years that would have to be paid. If someone fell behind on the payments (obviously 65% in your state did), most were still able to get a discharge at the end of the payment period. All of the rules changed with the bk reform act so the statistics on that will change also - now the payments are more realistic but for a longer period of time, 3 or 5 years depending on the disposable income. -
It's now 3 years if you are below the median income and 5 if you are above. Stuff happens such as the family car breaks down or the roof needs to be replaced during the plan and the debtor can no longer keep up. Living expenses such as rent, utilities, health insurance also goes up faster then ones income. If any of this happens even under new law then the debtor may still convert to a 7 if the means test says so.Comment
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If someone's below the median and they have low expenses such as living with parents for rent free or if they have non exempt property they want to keep then that person can qualify for a 3 year chapter 13.Originally posted by Credit HaterComment
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