Priority claims are unsecured debts that must be repaid first in Chapter 13. Back taxes incurred in the last three years and child support arrearages owed to a child or ex (not a government agency) are the most common priority debts that must be paid in full.Your Chapter 13 repayment plan must also provide that you will stay current on your secured debts that will last longer than your plan (e.g., mortgage). During the life of the plan you must also pay off any arrearages you owe.All other secured debt must be paid in full under the plan. Examples are tax liens and car loans.If you are incapable of paying these mandatory debts during your plan, you may have to give up some secured property on which you are making payments. Alternatively, you will need to reduce your living expenses.
Secured creditors might also make minor objections to your plan: your proposed interest rate is too low, the schedule takes too long to pay your arrearage, or, if you are proposing a cramdown, that the value you assigned the collateral is wrong.
The answer varies from debtor to debtor and court to court, but in general luxury items or services are not reasonable. For example, gardening services will be considered a luxury and thus not allowed. Loan payments for a luxury car will be reduced to the level of a standard car. Voluntary contributions to a retirement plan are generally not allowed unless you are approaching retirement age.
Areas Served:We handle bankruptcy cases through the mid-Hudson Valley including these counties and communities. Counties: Orange, Dutchess, Rockland, Westchester. Communities: Arlington, Beacon, Haverstraw, Middletown, Monsey, Mount Kisco, New City, Newburgh, Ossining, Peekskill, Poughkeepsie, Spring Valley, Stony Point, Suffern, West Haverstraw.