Expert: Mark J. Markus- California Bankruptcy Attorney - 6/1/2005

Question
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My question was in regards to filing a chapter 13, not 7, apparently you misunderstood my question.

How does the bankruptcy court determine whether or not all creditors will be repaid, and what portion of any disposal income must go to pay them?

Thanks, John

Followup To
Question -
I, filed a chapter 7, three years ago and told one could now file a chapter 13, and that under a 13 all creditors don't have to be repaid, is this correct?

If so, on Schedule J, how would one show the projected monthly income and expenses, and excess income, without showing it all going to repayu all creditors?

All I, have is one secured debt, which is a car, and that is all I, would like to repay and keep, all others are credit cards and personal debts, and would like to not have to repay them, so won't continue to be still broke for years after filing.

Thanks, John


Answer -
Whether or not creditors have to be repaid in full in a chapter 7 case depends on what the debtor's disposable income is, and how much non-exempt assets there are.

Answer
I'm sorry, that was a typo in my response.  My answer was for Ch. 13, I just typed Ch. 7 accidentally.   How much your creditors get paid depends on your disposable income and the value of your non-exempt assets.  It has nothing to do with the court, it has to do with the bankruptcy code.  Two of the requirements for confirming a Plan in a Ch. 13 are 1. You must provide all your disposable income into the plan for at least 36 months; and 2. your creditors must receive at least as much as they would get in a Ch. 7 case.   Thus, how much they get are dependent on those factors.