Chapter 13: The Basics

iStock_000008405962_Large(400x400)Chapter 13 bankruptcy is sometimes called a “payment plan” or a “plan of reorganization” and it works differently than a chapter 7 case. In a chapter 13 case you put forward your own payment plan. Your plan will include a monthly payment that you can afford to pay for the next 3 to 5 years. Unlike a chapter 7 bankruptcy which simply eliminates your unsecured debts and has no payments, a chapter 13 bankruptcy can be a very powerful tool to solve certain specific types of problems that you may be facing. For example, in a chapter 13 bankruptcy you can stop a foreclosure of your home and catch up back mortgage payments. Chapter 13 can also help with past due taxes, back child support, vehicles at risk of repossession, divorce settlement obligations, and might even be able to eliminate a 2nd mortgage while still allowing you to keep your home.

And, in exchange for committing to pay your creditors something, the law generally allows you to keep everything you own. There is no risk of liquidation as in a Chapter 7 case.

Payment plans are entirely dependent on your financial circumstances when your case is filed. Most clients are surprised to learn how affordable the payments in a chapter 13 bankruptcy can be. If you are in danger of losing your vehicle, home, if you own a business, or if you owe any back taxes you owe it to yourself to learn what a chapter 13 bankruptcy can do for you. The first step in solving any problem is learning about possible solutions. Together we can put together an affordable repayment plan that will protect your property and give you the peace of mind you deserve.