What if the debtor incurs new debts or needs credit during a chapter 13 case?
March 28, 2008
Only two types of credit obligations or debts incurred after the filing of the case may be included in a chapter 13 plan. These are: (1) debts for taxes that become payable while the case is pending, and (2) consumer debts arising after the filing of the case that are for property or services necessary for the debtor’s performance under the plan and that are approved in advance by the chapter 13 trustee. All other debts or credit obligations incurred after the case is filed must be paid by the debtor outside the plan. Some courts issue an order prohibiting the debtor from incurring new debts during the case unless they are approved in advance by the chapter 13 trustee. Therefore, the approval of the chapter 13 trustee should be obtained before incurring credit or new debts after the case has been filed. The incurrence of regular debts, such as debts for telephone service and utilities, do not require the trustee’s approval.
Is Personal Bankruptcy the Right Choice?
Find out NOW! Complete the Free Bankruptcy Evaluation form below and one of our representatives will call you and help you decide if filing bankruptcy is right for you!