If a creditor’s proof of claim is too large, you may need to object to it to avoid dismissal of your Chapter 13 case.
If a creditor’s proof of claim is a “priority” or secured debt is too high, object to it to avoid paying too much in your Chapter 13 case.
If you object to a creditor’s proof of claim in your Chapter 13 case, and prevail in that dispute, you pay nothing on that debt.
If a creditor doesn’t file a timely proof of claim on a debt in your Chapter 13 case, you pay nothing on that debt.
In some jurisdictions you can pay nothing to your “general unsecured” creditors, if all your money goes to paying higher priority ones.
The discharge of debts is just one of the tools of Chapter 13 for achieving your financial goals. It works differently than in Chapter 7.
If you are concerned that in a Chapter 13 case a debt resulting from surrendered collateral will cost you more, often it won’t.
Priority proofs of claim need to be carefully monitored in a Chapter 13 case. Make sure one’s filed so it gets paid, and at the right amount.
Often creditors’ proofs of claim do not affect the amount you have to pay in a Chapter 13 case. But sometimes they make a huge difference.
File your Chapter 13 “adjustment of debts” case at the right time to include all possible tax debts. Then budget right to prevent new ones.
You file bankruptcy most likely under Chapter 7 or 13, or possibly 11. Ch. 12 is for farmers and fisherman, Ch. 9 for governmental entities.
If you owe an employee wages or benefits, it’s likely a priority debt. Same if you are owed wages or benefits. More likely to be paid.
Here’s a scenario showing how Chapter 13 solves problems that Chapter 7 doesn’t solve in dealing with a creditor’s disputed lien.
When a creditor may not have a valid lien, Chapter 13 gives you a good way to defeat that disputed lien and the claim against your property.
When a creditor fails to enforce its lien in a Chapter 7 case, you are left exposed. Not so under Chapter 13.