Chapter 13 Bankruptcy is a repayment or reorganization of debts. It is also called a wage earner’s plan because it requires individuals to have a source of income to afford and maintain the repayment obligations. It is most often used when an individual does not qualify for Chapter 7 due to high income, ample equity in the property, or because a debtor needs to reorganize debts on a house, car, or taxes. It enables individuals with regular income to develop a plan to repay all or part of their debts.
Under Chapter 13, an individual can keep their home, car, and personal property. We may even be able to remove a second or third mortgage entirely. Unsecured debts are reduced or eliminated. The debtor’s total unsecured and secured debt must fall below a certain dollar amount, which is adjusted periodically for inflation.
As soon as the case is filed, legal actions such as repossessions, foreclosures, lawsuits, garnishments, liens and creditor harassment are immediately stopped.
Under Chapter 13 bankruptcy, individuals propose a manageable monthly repayment plan to be paid over three to five years. This payment is paid through the Chapter 13 Trustee, and repays a portion of an individual’s debts from their disposable income. At the end of the repayment period any eligible unsecured debt that has not been paid through the plan is discharged.
A bankruptcy discharge is a powerful and complete elimination of unsecured debt. The debt will not need to be repaid at some point in the future. A better financial future may be possible.
At the Law Offices of Kevin T. Simon APC, our job is to guide our clients to a new and better life during and after bankruptcy. We take care of everything – from filing paperwork with court, negotiating with creditors to reduce debt, and developing a repayment plan to be approved by the Court. Ask our attorneys if a Chapter 13 bankruptcy is the best option for you.
Call (818) 783-1674 or contact us online to schedule a Free Consultation with Kevin Simon.