Does Interest accrue in my Chapter 13 Florida Bankruptcy?
Many times debtors ask whether or not interest accrues on debt included in the bankruptcy. Interest does run on your secured debt and at the same contract rate the debtor agreed to (for the most part).
There are instances where the property can be crammed down and the Till interest applied. However, for the most part, the contract rate or terms that the debtor agreed to are the terms the debtor will have to live by unless a modification is reached with the lender. Interest on unsecured debt does not accrue. Interest on secured arrears do not accrue. Interest and penalties on tax debt do not accrue.
Therefore, when a debtor lists $100,000.00 in unsecured debt on the schedules, the most that the debtor could be required to repay the unsecured creditors is $100,000.00. When the Trustee requires a debtor to submit a 100% plan, this is what he or she is referring to. The Trustee believes the unsecured creditors should be paid at 100% over the life of the plan.
If you have questions about Florida Divorces or Bankruptcy Law contact a Florida Attorney
Greg Gilbert
Keith Maynard
