a plan, following the rules set forth in the bankruptcy laws, to repay creditors over a period of time, usually from future income. The exact payment amount varies from case to case, depending on disposable income and the debts that are to be restructured.
The debtor’s plan is a simple document outlining to the bankruptcy court how the debtor proposes to pay current expenses while paying off all the old debt balances. The debtor’s property is protected from seizure from creditors, including mortgage and other lien holders, as long as the proposed payments are made. The plan generally requires monthly payments to the bankruptcy trustee over period of three to five years. Arrangements can be made to have these payments made automatically through payroll deductions.