Basically, filing Chapter 13 Bankruptcy
means that you will pay back at least a portion of your debt using a Court approved payment plan that lasts
approximately three to 5 years.
Wondering which chapter you qualify for? Want to know before you see an
attorney? Just click here and fill out this form, we just need some basic information to get started, and we will contact you
shortly after you finish to let you know which chapter bankruptcy is most likely right for you!
Generally, chapter 13 BK is preferred by debtors who have a valuable asset,
such as a home, that is not completely covered by exemptions and that they wish to keep. This is possible because under Chapter Thirteen BK a
debtor proposes a plan to repay creditors over a three to five year period during which the debtor can make up overdue payments
on any assets and pay into the plan the equivalent value of any assets not covered by exemptions. Since the debtors plan will
require regular monthly or biweekly payments, Chapter 13 BK is usually only appropriate for an individual debtor who
has a regular source of income.
At a confirmation hearing,
the court either approves or disapproves the plan, depending on whether the plan meets the Bankruptcy Code’s requirements
for confirmation. Chapter 13 is very different from chapter 7 bankruptcy, since the chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors,
through the trustee, based on the debtor’s anticipated income over the life of the plan. Unlike chapter 7 bankruptcy, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan
before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor action while the
plan is in effect. The discharge is also considerably broader (i.e., more debts are eliminated) under chapter 13 than the
discharge under chapter 7.
