Chapter 13 Bankruptcy

Chapter 13 Bankruptcy allows you to reorganize your debts.  Depending on your situation, you may not qualify to liquidate all of your debts under Chapter 7 bankruptcy.  If you do not qualify for a Chapter 7 bankruptcy, you can file a Chapter 13 bankruptcy.  In Chapter 13 bankruptcy, your debts are reorganized and you will make one monthly payment to the Chapter 13 trustee under a plan that lasts from three to five years.  The monthly payment is usually much lower than your monthly payments to creditors prior to filing, and in many instances you only pay back a percentage of your unsecured debts.  You can stop foreclosure of your home with a Chapter 13 filing and prevent the forced sale of your home.  If you have a pending foreclosure, court date, sale date, or are worried that the bank is getting ready to foreclose, a Chapter 13 filing will stop any and all foreclosure proceedings prior to the sale.

Chapter 13 Frequently Asked Questions

What is Chapter 13?
It is a payment plan that restructures your debt.

Why file a Chapter 13?
Some people have to file a Chapter 13 because they do not qualify for a Chapter 7, either because they have a prior Chapter 7 within the past 8 years, or have assets that can’t be exempt. Some people file a Chapter 13 to save a home from foreclosure or to pay back taxes or child support.

What is the difference between a Chapter 13 and a Chapter 7?

A Chapter 13 is a payment plan that reorganizes your debt.  A Chapter 7 is debt elimination.

How long does a Chapter 13 take?
3-5 years.

Can I keep my house?
Yes, even if you’re behind in payments, a Chapter 13 allows you to keep your home and pay the arrears through the plan.

Can I keep my car? 
Yes, even if you’re behind on your car payments you can keep your car in a Chapter 13.

How soon can I file? 

You can file 24 hours after completing the required credit counseling class.