Chapter 13 Bankruptcy Basics
Filing Chapter 13 May Halt Foreclosure or Repossession
One of the two main personal bankruptcy chapters, Chapter 13 bankruptcy is often used to stop home foreclosure or car repossession and allow debtors time to catch up on payments on secured debts.
In a Chapter 13 bankruptcy, the debtor enters a repayment plan to settle debts, often called a "wage-earners plan".
The Chapter 13 plan is a three-to-five year repayment plan overseen by the bankruptcy court. During this period, the debtor makes monthly payments to the bankruptcy court, and any property tied to the debts, such as homes and cars, remains in the possession of the debtor.
Chapter 13 bankruptcy is usually preferred by those who want to keep their homes, cars and other property while catching up on past-due debts, or by those who do not pass the Chapter 7 means test.
Could Chapter 13 Bankruptcy Provide the Breathing Room You Need?
Chapter 13 bankruptcy is generally helpful for people who:
- have had a temporary break in income—maybe due to a sudden job loss, medical emergency or other large, unexpected medical expenses—and fallen behind on bills.
- are "back to normal" now and can afford normal monthly payments, but just cannot catch up on past-due payments or reach a workable agreement with creditors.
- make a good living and can afford to make some payment toward past-due bills, but cannot pay as much as creditors are demanding.
- have a lot of equity in their homes (or other property).
- cannot qualify for the relief that Chapter 7 bankruptcy offers.
For more information on how filing Chapter 13 bankruptcy may help you eliminate your debts and protect your property, connect with a local bankruptcy attorney. Simply fill out the form below or call 877-833-2410 to discuss bankruptcy with an attorney near you today.
The Chapter 13 Bankruptcy Repayment Plan
Unlike Chapter 7 bankruptcy, which works to eliminate debt quickly through liquidation and debt discharge, Chapter 13 bankruptcy helps people with financial difficulties keep their property while gradually catching up on past-due balances.
Chapter 13 bankruptcy can give people in financial trouble the time and space necessary to catch up on debts without fear of repossession or foreclosure.
Chapter 13 Bankruptcy Requirements
Unlike Chapter 7 bankruptcy, which as an eligibility test (the means test), Chapter 13 bankruptcy's reorganization of debts is open to most people seeking bankruptcy help.
Bankruptcy law allows anyone whose unsecured debts (such as credit card debts or medical debts) are less than $360,475 and secured debts (such as mortgages or car loans) are less than $1,081,400 to file Chapter 13 bankruptcy.
Anyone who is planning to file for either Chapter 7 or Chapter 13 bankruptcy must first receive a Credit Counseling Briefing from a certified credit counseling agency.
After filing but before discharge, every bankruptcy petitioner must also complete a Debtor Education Course. In a Chapter 13 bankruptcy, this can be completed at any time during the three-to-five year repayment plan.
Discuss Chapter 13 Bankruptcy with a Local Bankruptcy Attorney
Connect with a local bankruptcy attorney to discuss your options for filing personal bankruptcy and how Chapter 13 bankruptcy may allow you to catch up on past debts without having to wave goodbye to your home or car.
Connect with an attorney today. Simply fill out our free bankruptcy evaluation form or call toll-free 877-833-2410 to speak with a bankruptcy attorney near you who can evaluate your case.