What is Chapter 13 Bankruptcy?

In a Chapter 13 bankruptcy you are allowed to keep your property, but you pay back usually a small portion of your debts over a three-year or five-year period.  Because of the payback feature of this Chapter of bankruptcy, it is also called a reorganization bankruptcy.

Chapter 13 Eligibility

To be eligible for Chapter 13 bankruptcy you are required to use your income to repay some or all of your debt.  You will have to show the bankruptcy Court that you can afford to meet your payment obligations.  If your income is irregular or too low, you may not qualify for a Chapter 13.

Chapter 13, the Process

Before you can file for bankruptcy, you must receive credit counseling from an agency approved by the United States Trustee’s office.  Our office will provide you with a list of counseling providers.  The counseling agencies are allowed to charge a fee for their services, but if you cannot afford to pay the nominal fee, they must provide the counseling for free or at a reduced rate.  In addition to the counseling fee, you will have to pay the bankruptcy Court’s filing fee.

Chapter 13 Repayment, or The Chapter 13 Plan

The most important part of your Chapter 13 bankruptcy is your repayment Plan. Your Plan describes in detail how much you will pay in to the bankruptcy Trustee each month on each of your debts.

How Much You Must Pay

Your Chapter 13 plan is required to pay your Priority debts in full.  Priority debts are child support, alimony, wages you owe to employees, and certain tax obligations.

Your plan must include your regular payments on secured debts, such as your mortgage payments and your car loan, as well as repayment of any late payments on those debts, and a prorated payment (or a proportional payment) on all your unsecured debts (i.e. credit cards, medical debts, etc.).

Contact my legal assistant, Tina, at 941-750-8383 or via email through our contact page to schedule your free consultation.

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