In the practice of bankruptcy law, attorneys will sometimes refer to a 100% Chapter 13 Bankruptcy Plan. This generally means that the debtor or the bankruptcy filer must pay 100% of the full balances owed to his or her unsecured creditors. Most bankruptcy filers who are in a 100% plan are paying such unsecured creditors in full, because the filer or debtor has significant disposable income, to the extent that the debtor is able to pay his or her unsecured creditors in full.
In the Middle District of Florida, Tampa Division, a Chapter 13 debtor in a 100% plan is not required to pay interest on the debts owed to unsecured creditors. The debtor is paying back such unsecured creditors in full, without interest, over a period of sixty (60) months.
Although such a debtor, with disposable income sufficient to fund a 100% Chapter 13 Bankruptcy Plan, would be required to pay his or her unsecured creditors in full or 100%, that does not necessarily mean such debtor will pay all of his or her unsecured creditors. Federal Rules of Bankruptcy Procedure 3002(c) provides that such unsecured creditors must file a formal proof of claim within 70 days after the order for relief is granted. The date for which the order for relief is granted is generally defined to be the date of the filing of the Chapter 13 petition.
If the creditor does not file a proof of claim or files a proof of claim late, and such claim is disallowed, then the creditor is prevented from participating in the receipt of payments pursuant to the debtor’s or debtors’ Chapter 13 Bankruptcy Plan. Prior to the Confirmation of the Chapter 13 Bankruptcy Plan, which generally comes three to six months after the filing of the Chapter 13 Bankruptcy Petition, the debtor or the debtor’s attorney may reduce the monthly payment to the Chapter 13 Bankruptcy Trustee, to reflect the disallowed claim or claims.
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