13-BANKRUPTCY

CHAPTER 13 BANKRUPTCY

A Chapter 13 Bankruptcy is filed when a debtor does not qualify for a Chapter 7. Unlike a Chapter 7, which liquidates (completely gets rid of), Chapter 13 involvs the process of restructuring debts which allows the debtor to use whatever income they may have in the future to pay off creditors according to their ability. Chapter 13 Bankruptcy often provides a solution for people who have short-term financial setbacks, illness or large unexpected expenses. For these people who have had these kind of sudden setbacks, but who do have a regular income, a Chapter 13 Bankruptcy can create that breathing room that will allow them to catch up on their bills.

In a Chapter 13 Bankruptcy, the debtors are allowed to keep all of their property and the Bankruptcy Court approves a new interest-free plan for repayment. Chapter 13 Bankruptcy Plans are either a three (3) or a five (5) year plan for repayment of debts. During the term of the plan, a single payment is made to the Court Trustee who then redistributes payments to all the creditors under the plan. During the life of the Chapter 13 plan, debtors do not come in direct contact with the creditors and do not make direct payments to them. This repayment of debts does not always have to be 100% of your total debts and can sometimes be as low as 10 cents to the dollar. How much you pay back will be determined by your disposable income (net income minus expenses) at the end of each month. At the end of your plan, whatever amount of debt is not paid back will be completely discharged as if it never existed.

If you are looking to stop a foreclosure or a repossession, a Chapter 13 Bankruptcy plan might be the best option for you.

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LEGAL DISCLAIMER

NOTHING WRITTEN ON THIS WEBSITE IS INTENDED TO BE LEGAL ADVICE. EVERY CLIENT'S SITUATION IS UNIQUE AND DIFFERENT. PLEASE CONSULT WITH A LICENSED ATTORNEY BEFORE MAKING ANY DECISIONS REGARDING YOUR SITUATION AND CASE.

WE ARE A DEBT RELIEF AGENCY. WE HELP PEOPLE FILE BANKRUPTCY UNDER THE BANKRUPTCY CODE.