CHAPTER 13

Chapter 13

What Is Chapter 13 Bankruptcy? 


Under chapter 13 bankruptcy, a debtor does not get an immediate “fresh start,” but rather makes a concerted, years-long effort to pay back their debts as well as they are able. When a debtor files for chapter 13 bankruptcy, he or she proposes a 3-5 year repayment plan to creditors offering to pay off all or part of the debts from the debtor’s future income. Chapter 13 has been used to prevent house foreclosure and make up missed car or mortgage payments. This chapter also helps you to pay back taxes and keep valuable non-exempt property.

Chapter 13 bankruptcy is generally a better idea than chapter 7 bankruptcy for debtors who have a stable income and a high amount of non-exempt assets. However, there are qualifications and exceptions to keep in mind. To learn whether you would qualify and if chapter 13 is the best option for you, it’s best to contact a bankruptcy lawyer.

How to File for Chapter 13 Bankruptcy

Because chapter 13 is a complex form of bankruptcy, it is best to have the assistance of an attorney as you go through the proceedings. An attorney will understand how to file for chapter 13 bankruptcy and can guide your filing from start to finish.

However, if you are considering filing for chapter 13 on your own, here are the steps you can expect to take:
  • Determine if you qualify for chapter 13 bankruptcy. In order to qualify for chapter 13 bankruptcy, first, you must have disposable income, i.e., money left over after paying for essential expenses. You also cannot have debts in excess of a certain amount, and you need to prove that you are current on your income taxes.
  • Complete the appropriate forms and file them with the court. The forms you will fill out are available on the U.S. Courts website. Many of the forms you would use to file chapter 13 bankruptcy are actually the same as chapter 7 bankruptcy. In them, you have to list your income, assets, expenses, and debts. You’ll also have to explain your repayment plan.
  • Attend two hearings. Most of the time, you will only need to attend two hearings in order to complete the process. The first hearing will be a meeting with your creditors and a court-appointed trustee. They will ask you questions about your debts, and together you will negotiate your repayment plan. Once all parties are agreed to the plan, you will attend a confirmation hearing with a judge to confirm the plan.
  • Pay back your debt according to the payment plan. Most debt repayment plans last 3-5 years. You must pay back the money as ordered by the court, and you should live within your court-approved budget. As long as you do your part, after the time covered by the repayment plan is over, your debts will be discharged (or wiped away) by the court.
The best way to successfully file for chapter 13 bankruptcy is to have an attorney help you through the process. Lawrence Stuart has years of experience helping clients through chapter 13 bankruptcy. He understands the courts, the process, and all the twists and turns your case may take.

Meet with One of Our Bankruptcy Attorneys Today!

Learn more about whether chapter 13 bankruptcy is right for you. Call Lawrence Stuart today to schedule a consultation.
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