When a New York resident is down on their luck and falls into debt, what happens? There are several options out there for those seeking debt relief. One of these options is bankruptcy.

Today we will look at Chapter 13 bankruptcy in particular. This type allows you to create a repayment plan with more manageable payments. You must then make these payments over a set period of time. You release some debt, but the rest you must pay off. You also have certain obligations to fulfill. What are those obligations?

First obligations as a debtor

The United States Courts discusses everything anyone needs to know about bankruptcy. They also discuss the obligations that a debtor has when they create a debt repayment plan.

The first obligations are to pay your filing fees and file all necessary documents and forms. You must file with a local bankruptcy court. You must also make your payments within 120 days of filing for bankruptcy. Some people may get an extension. If this applies to you, you must pay within 180 days. You cannot proceed without fulfilling this first step.

Primary obligations as a debtor

The primary obligation is for you to repay creditors. Your plan must also take administrative fees into consideration and pay them off in full. You must pay off priority debts first. This includes child support payments or tax debt that is not dischargable. Next, you pay off other secured debts like tax liens. After that, you pay unsecured creditors. This includes back rent and medical bills.

Finally, you must stick to the plan you create. There is no back-up bankruptcy for Chapter 13 bankruptcy. You need to create a plan and stick with it, or risk having no other options.