When a person files for Chapter 13 bankruptcy in New Jersey, part of the process is a requirement that the filer, also called the petitioner, submit a repayment plan to the bankruptcy court. Unless the court grants the petitioner an extension, he or she must submit the repayment plan within 14 days after the petition is filed. The repayment plan may be submitted at the same time as the petition. The submitted plan must provide for payments to be made to the bankruptcy court in fixed amounts on a regular basis.
Typically, the plan will set out payments to be made either monthly or biweekly. After each payment is made, the bankruptcy trustee will distribute the funds to the petitioner's creditors according to the plan's terms. In a Chapter 13 bankruptcy, the creditors might not be entitled to collect the full amounts of their debts. There are three different kinds of claim that a creditor may have: secured, unsecured and priority.