Creating A Financially Feasible Chapter 13 Repayment Plan: 3 Tips To Negotiating With Unsecured Creditors

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When filing for chapter 13 bankruptcy, your repayment plan is basically the crux of your case. Not only should your repayment plan be fair to your creditors, but it should also be financially feasible and affordable; otherwise, you're not going to be able to successfully repay the plan to achieve the financial freedom you deserve. A bankruptcy lawyer or trustee can help you negotiate terms and conditions with unsecured creditors; however, the ball is still in your park, as you have total control over how your plan will be set up. Here are 3 tips to implement during the negotiations.

Bargain Lower Than What You Expect

In general, unsecured creditors are the last creditors you need to pay. They aren't entitled to much, and they know it. You can expect to pay anywhere from 0% to 100% of your debt based on how good you are at negotiating. Before you begin, you want to determine what is a financially feasible amount to repay based on the length of the repayment plan, the amount of assets you own, the amount of disposable income you have to spend each month, among many other factors. You want to start off with a low amount, and hope that the creditors will go for it. For example, if you're expecting to repay 30%, you should offer to repay 15% at first, and work your way up to a compromise from there.

Offer to Make Cash Payments Soon to Settle the Debt

As with everything, cash is key. This is true for repaying unsecured debts as well. You will have a lot more bargaining leverage if you are able to save up a sizeable lump sum amount before you negotiate, as the creditors are usually more than willing to settle if you can promise them that the funds will be transferred right away. The creditors really don't want to have to deal with you in court or have you make several smaller payments over a longer length of time.

Don't Be Afraid to Make Several Offers

If the unsecured creditors are not willing to budge, don't be afraid to make several offers. Your bankruptcy lawyer or trustee will let you know whether you should include any additional information regarding your bankruptcy with your negotiations. If you are able to let the unsecured creditors see where you stand financially and what's the best they can get out of you, you'll have a higher chance of being able to settle with them.


Filing for bankruptcy might seem intimidating. Coming up with a financially feasible and affordable chapter 13 repayment plan can be difficult. Fortunately, there are a lot of places where you can seek legal assistance from. A professional with experience in the field can give you further insight as to what you can do to lower your payment amounts and be more convincing when negotiating with unsecured creditors. For more information, visit websites such as