Post-petition Claims in Chapter 13 Bankruptcy

Chapter 13 bankruptcy case lasts for 3 or 5 years. Some claims may arise after the filing, most notably tax claims. Usually, the tax authorities will file a claim so that they are paid out of your plan. As a priority claim, you must pay all tax claims in full-any unpaid tax claims are not dischargeable.

Another type of post-petition claim that will arise comes from new credit that you need during the course of the bankruptcy, such as obtaining a loan to fix a motor vehicle or for medical treatment. Such credit must be for property or services necessary for your performance under the plan. To protect you from unwise financial decisions, the creditor must get prior approval from the trustee before the granting of credit.

If the creditor grants you credit before obtaining the approval of the trustee where it would have been practicable and the claimant should have known to get such approval but didn't do so, then the creditor's claim will be disallowed. As a result, the creditor's claim will not be discharged, since only claims provided for in the payment plan are discharged, but the creditor will have to wait until the close of the bankruptcy before collecting on its claim.

There creditors filing post-petition claims have two options. First, creditors can file a claim so that it is provided for in the payment plan. With this option, the creditor gets paid sooner but it may be less than the debt and its debt will be discharged at the close of the case. Second, creditors can wait until the bankruptcy is over before collecting payment, which could be several years. If the creditor waits until the bankruptcy is over, then the creditor may be able to get full payment eventually, since its debt will not be discharged, but takes the risk that it will not be paid.

Usually, some creditors may get in touch with you to ask you to reaffirm certain debts. More often than not these will be car loans, mortgage loans or other secured debts. Whether you have to reaffirm a debt to retain ownership of the property which secures the debt usually depends on your local laws and procedures.

Should you choose to reaffirm a debt, it means that you are reinstating your legal responsibility for that loan. So if you do are unable to keep up with the payments, the creditor can try to repossess its collateral and to take legal action against you for any deficiency (the lacking amount from the amount the creditor is paid with the repossession and sale of its collateral).

If you incur debt after you file your bankruptcy petition, it is not included in the bankruptcy discharge and continues as your personal obligation regardless if it is incurred prior to your discharge. The forgiveness is only applicable to debts that existed in some form on the petition date.