Chapter 13 Bankruptcy

In a Chapter 13 bankruptcy, an interest-free repayment plan is set up with the Bankruptcy court

This plan shows how much money you will pay to the court each month, and how that money will be handed out to your particular creditors.  The creditors cannot collect from you, and the creditors are required by a Federal Court order to adhere to the terms of the plan.

Unlike a Chapter 7 BK, you must be working or have a consistent source of income to be able to file a Chapter 13 BK.  Not only must you be able to pay for your monthly living expenses, but you must also be able to make your payment to the court to consolidate your debts.  All of your debts should be included in a Chapter 13 BK, even though not all of them will be discharged at the end.

Commonly Asked Chapter 13 Bankruptcy Questions

Why do I need to file a Chapter 13 Bankruptcy?
-If your home or some other property is worth more than can be protected, and you want to keep it.
-If your income is more than what is allowed to file a Chapter 7 BK.
-If you are behind on your home or car payments and wish to keep your home or car.
-If you filed a Chapter 7 BK in the past 8 years.

Why can’t I file a Chapter 7 instead?
-You might make too much money to file a Chapter 7 BK.
-Your home or some other possession may not be protected in a Chapter 7 BK.
-You are late on your mortgage or car payments.
-You filed a Chapter 7 BK within the last 8 years and received a discharge.
-Your debts can’t be discharged in a Chapter 7 BK, but can be dealt with through Chapter 13.

If Chapter 13 BK is basically consolidation,why don't I just consolidate and not file BK?
Chapter 13 BK is Consolidation, but it’s through the Bankruptcy Court. The Court has the power to stop collections, harassment, and interest growing on your debts. Consolidation companies cannot provide such help.

I want to keep my home but I fell behind on the mortgage, can I still keep it?
YES! Chapter 13 BK will allow you to repay what you owe to the mortgage company over time, which allows you to stay in your home and not worry about the foreclosure.

My car is going to be repossessed soon, what can I do?
If you want to keep your car, then you can file Chapter 13 BK to protect it. If you don’t want to keep it, you could file either Chapter 7 or Chapter 13 BK, depending on the rest of your situation.

My only debts are student loans or tax debts, do I need to file BK?
You may want to file Chapter 13 BK to stop interest from accruing, stop any possible garnishments that may happen, and get your debts settled quickly and efficiently.

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