Ciera buys a car from Town Motors.Less than a year later,Ciera files for bankruptcy underChapter 13.Her plan must provide that Town retains a lien on the car until the entire debt is paid

Question

Quizplus · Accepted Answer

Under Chapter 13 bankruptcy, individuals are allowed to reorganize their debts and make repayments over a specified period of time, usually 3-5 years. In order to qualify for this type of bankruptcy, the debtor must have a regular income and their debts must fall below certain limits. The repayment plan is designed to prioritize certain debts and ensure that all creditors receive some payment over the course of the plan. In this case, because Town Motors extended credit for the purchase of the car, they are entitled to a secured interest in the vehicle. This means that they have a lien on the car and must be repaid in full before the lien can be released. Ciera's bankruptcy plan must include provisions for repaying this debt and retaining the lien until it is paid off. Therefore, choice B is correct. Choices A, C, and D are incorrect because they do not accurately reflect the requirements of a Chapter 13 repayment plan.

Ciera Buys a Car from Town Motors