Kentucky Bankruptcy Law

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Interest Rates on Secured Claims in Chapter 13 Cases in the EDKY

Tremendously valuable information.

Based on experience, not only is the interest on Federal past due taxes lower, but they are also easier to deal with.

Chapter 13 Trustee, EDKY: Trustee's Blog

The prime rate of interest increased a quarter of a point to 4% effective March 16, 2017.  Read on for information on how this affects chapter 13 plans in the EDKY, and what other interest rates are applicable to secured claims.

Prime rate:

Generally the interest rate on secured claims being paid through a chapter 13 plan is prime plus a risk factor of 1 to 3 points.  We often refer to this as the Till rate, named after the 2004 Supreme Court opinion which advanced the formulaic “prime plus” method of setting interest rates in chapter 13 cases.

The plan in the EDKY sets forth a “default” interest rate of the Wall Street Journal (WSJ) prime rate on the date of confirmation plus 2 percentage points.  Thus, for secured claims that are not specifically provided for in the plan, or for those secured claims that are provided for…

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April 7, 2017 Posted by | Uncategorized | Leave a comment