Chapter 13 Bankruptcy Is Designed to Set Up A Repayment Plan

Chapter 13 is designed for individuals with regular income who are temporarily unable to pay their debts but would like to pay them in installments over a period of time.

You are only eligible for chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.

Under chapter 13 you must file a plan with the court to repay your creditors all or part of the money that you owe them, using your future earnings.

Usually, the period allowed by the court to repay your debts is three years, but no more than five years. Your plan must be approved by the court before it can take effect.

Under chapter 13, unlike chapter 7, you may keep all your property, both exempt and nonexempt, as long as you continue to make payments under the plan.

Chapter 13 Bankruptcy Can Stop Foreclosure

A Chapter 13 bankruptcy will also immediately stop foreclosure proceedings and allow you 36 months (60 months in some circumstances) to catch up your delinquent home and auto payments.

If the filing of a Chapter 13 bankruptcy is deemed to be appropriate in your situation, we will develop a plan to be filed with the court telling the creditors how much they will receive. This plan will be developed based upon your budget and the property you are keeping. In many cases, the bankruptcy court will approve a plan that provides for payments that are only a percentage of your total unsecured debts and that are payable over a period of time up to five years. A Chapter 13 bankruptcy may also allow you to re-structure your car loans so that you repay only what the car is currently worth, not the entire balance claimed by the creditor.

Chapter 13 Bankruptcy Discharges All Debt At The End Of The Plan

After completion of payments under your plan, all of your debts are discharged except for alimony and support payments, student loans, certain debts including criminal fines and restitution and debts for death or personal injury caused by driving while intoxicated from alcohol or drugs, and long term secured obligations. Filing a Chapter 13 Bankruptcy will put you on track towards debt elimination and re-establishing credit quickly.

We are here to help you. If you are considering filing a chapter 7 or chapter 13 bankruptcy, or just want to discuss all of your options, you are invited to make an appointment for a free consultation with Joe Kanan or Mike Boucher. Contact us today at mary@boucherkanan.com or call us at (810) 982-3961.