Law FIrm, llc

Chapter 13 Bankruptcy


What is A Chapter 13 Bankruptcy?


​Chapter 13 Bankruptcy isn't for everyone. A Chapter 7 Bankruptcy offers immediate and complete relief of many oppressive debts. A Chapter 13 Bankruptcy is a form of reorganization or debt consolidation.  In Chapter 13 Bankruptcy, you keep your property, but pay back all or a portion of your debts over a three to five-year period.  

Who Should File A Chapter 13? 

Usually those who file a Chapter 13 are those who do not pass the means test.  The means test is an economical test used to determine whether a debtor has the means to pay his debts.  Others who may choose to file a Chapter 13 Bankruptcy include: individuals with extreme debt owed to the IRS that cannot be excluded; individuals trying to stop a foreclosure or repossession quickly; and individuals with large amounts of equity in their home. 


What is The Repayment Plan?

The most important part of your Chapter 13 paperwork will be a repayment plan. Your plan will describe in detail how and how much you will pay each of your debts.   Your Chapter 13 plan must pay certain debts in full.  Priority debts are considered important enough to move them to the head of the bankruptcy repayment line. Priority debts include alimony and child support, wages you owe to employees, and certain tax obligations.The plan must include regular payments on secured debts, such as a home mortgage and a car loan, if you plan to keep that property, as well as repayment of any arrearages.The plan must also demonstrate that any disposable income you have left after making these required payments will go towards repaying your unsecured debts, such as credit card or medical bills. You do not have to repay these debts in full or in some cases even at all. You just have to show that you are putting any remaining income towards repayment.


More Information

For complete information about Chapter 13 Bankruptcy, including what happens to your home, car, and debts, contact our law office for a free confidential consultation.