Filing Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is a court-supervised debt consolidation repayment plan, where you have up to five (5) years to repay creditors a portion or all of what you owe on your bills. Chapter 13 cases are available to most sole proprietors, married couples, and individual debtors, and cases generally last for a period of three (3) to five (5) years.
The amount of your monthly plan payment, the length of your plan, and the sum that must be repaid to creditors over the life of your Chapter 13 plan depend on a number of factors, including the types of debts that you owe, the real and personal property you own, and your historical and current income and living expenses. If you choose to consult our office and filing Chapter 13 is determined to be the best course of action for you, the attorney will review these factors with you in detail and advise you of the amount you would be expected to pay each month through a Chapter 13 plan.
Based on information supplied by you, our office will draft your Chapter 13 plan calling for you to make monthly plan payments to the court-appointed Chapter 13 Trustee. When the court approves your plan, the Chapter 13 Trustee will disburse your plan payments to your creditors in the manner described in your plan.
Chapter 13 Benefits
In general, a Chapter 13 bankruptcy filing:
- Will allow you to save your home and stop a foreclosure before the foreclosure sale date by curing past-due mortgage payments over a period of up to five (5) years while also maintaining ongoing future mortgage installment payments through your Chapter 13 plan
- Will stop a vehicle repossession and allow you to cure any delinquent payments on the vehicle and maintain future ongoing payments through the plan
- Stops garnishments of wages and bank accounts and may allow you to get garnished funds returned to you after filing
- Gives you time to pay back taxes that you cannot discharge in Chapter 7
- Protects co-signers and may give you time to pay back co-signed debt
- Permits you to consolidate and pay traffic tickets and court fines over time through your plan and may enable you to reinstate your driver’s license once your plan is in effect
- Stops creditors’ collection charges and interest
- Allows you to keep all of your property while making monthly payments on your bills through your Chapter 13 plan and paying creditors at least what they would have received in a Chapter 7 case over the length of your plan
- May not require you to pay all unsecured debts like medical bills and credit card balances in full, and may thus reduce your overall monthly payments to creditors
Chapter 7 bankruptcy may be the right avenue for you to follow, or you may need the relief afforded to you by filing a Chapter 13 consolidation repayment plan.