Legal Question in Bankruptcy in United States

It's easy to get confused on this. In order for a creditor to be paid in a Chapter 13 case a claim must be filed. If no objection to the claim is made, then it is deemed allowed. Once allowed, then it will be paid under the terms of the Confirmed Chapter 13 Plan. That's where there arises a difference between the amount owed, claimed and scheduled. This should help.

Say you file your case and believe that you owe Pioneer Credit $3,400. (This would be the amount scheduled.) Pioneer files a claim for $3,677.00. No objection is filed, so this will be the amount deemed to be owed for purpose of payout in the chapter 13 plan. Your plan provides for a dividend of 70 to 76% and you actually make the payments through the plan during the entire 5 year term. However, the total amount available to be distributed to unsecured creditors represents only 72% of the total of all claims allowed. In that case, Pioneer would actually get paid 72% of $3,677. This is a simplified example just for illustration.

Hope this helps.