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Chapter 13 Bankruptcy

Chapter 13 bankruptcy enables debtors with regular income to discharge most debts without losing any personal property. It is ideal for debtors who have significant in real estate or other non-exempt assets. Statistically, nearly all bankruptcies filed under chapter 13 without an attorney fail. Our attorneys can help you.

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Understanding how the different chapters of bankruptcy work is critical to deciding whether to file and deciding which chapter is right for you.

Chapter 13 — Overview

Chapter 13 bankruptcy is sometimes called the “repayment” bankruptcy because it consolidates debt into a 3-5 year repayment plan based on the debtor’s disposable income. Though you may ask how this is different than debt consolidation, filing bankruptcy gives debtors the benefit of an automatic stay that suspends all collection activity and at the end of your chapter 13 plan, the remaining debt is discharged.

Advantages vs. Chapter 7

Filing any type of bankruptcy stops collection action, including creditor harassment, lawsuits, foreclosure, repossession, and wage garnishments, but Chapter 13 offers several advantages over Chapter 7. One of the greatest benefits of Chapter 13 is that it can enable debtors to cure delinquent mortgage payments over time through the bankruptcy plan. This allows people who are several months behind on their mortgage to stop foreclosure and retain their home. Because it consolidates most debts, it also usually reduces the debtor’s overall monthly payments. Chapter 13 also enables debtors to pay a significant portion of their attorney’s fees through the plan, minimizing their upfront out-of-pocket costs to retain a bankruptcy attorney. It also impacts credit less negatively. Chapter 13 bankruptcy is reflected on your credit report for seven years while a Chapter 7 bankruptcy remains for ten years.

Below are some resources to further explain the different types of bankruptcy, the respective benefits, and the consequences of filing or not filing.

We offer free consultations to help you decide whether filing bankruptcy is the right choice for your unique situation.

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