Chapter 13 Bankruptcy
Chapter 13 bankruptcy is defined as, “Adjustment of Debts of an Individual with Regular Income”.
It allows you to keep the majority of your assets, including items that a collector has a lien on, such as your car or home.
Under Chapter 13, there are certain debts you can get rid of or pay back, where you wouldn’t be able to do that under Chapter 7.
Chapter 13 helps you get rid a lot more debt, including past due child support payments.
How Does it Work?
With Chapter 13 bankruptcy, debts are consolidated into installments that can be paid over time, usually in 3-5 years.
During that time it is illegal for creditors and debt collectors to send payment reminder notices or verbally harass you over the phone.
In this process, your only responsibility is to the trustee appointed to oversee your payment collection.
Upon completing your debt reconciliation plan, remaining debts are discharged. Receiving a full Chapter 13 bankruptcy discharge, however, can be a very complicated process that requires legal counseling.
Who is it for?
It’s meant for people who don’t qualify for Chapter 7 bankruptcy because of their income bracket, or for people who are unable to receive an immediate debt release.
Chapter 13 is often the best solution for people who have a stable income, but struggle to consistently pay monthly bills.
Chapter 13 is typically for people who:
- Are behind on mortgages or car payments and want to keep those assets
- Do not qualify under Chapter 7 because they already filed under Chapter 7 within the past 8 years
- Make too much money or have too many assets to qualify for Chapter 7 and want to keep those assets
Be sure to have a highly experienced bankruptcy lawyer review your specific situation, documents and debts to ensure all details and intricacies have been thoroughly covered.
Set up your FREE consultation now to find out if filing for Chapter 13 is in your best interest.