Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a reorganization bankruptcy which means that your debt is restructured and you must pay some or all of it back over a time period which is normally three to five years. However you are not required to forfeit your property or other assets. There are eligibility requirements, see additional information on chapter 13 eligibility below, but overall this is good choice for many consumers.

Bankruptcy law can be confusing therefore I strongly recommend considering chapter 13 attorneys to help you navigate the details of chapter 13 law and how it relates to your situation.

Typically someone who files for Chapter 13 of the bankruptcy code is interested in maintaining their assets and plans to repay some or all of their debt but requires some help to restructure the debt into more manageable, lower interest rates longer terms, payments. Filing for chapter 13 allows the individual protection from collection efforts of creditors while providing a plan to pay off the debt.

Chapter 13 Bankruptcy Info

The time a Chapter 13 bankruptcy shows on your credit report is potential less than other bankruptcies, therefore it takes less time to rebuild your credit.

However even if you pay all of the creditors in full, the bankruptcy will still appear on your credit report.

You may be able to discharge debts in a Chapter 13 that would be not be dischargeable under other Chapters, for example, fraud judgments.

You remain under court supervision for the life of your repayment, and are forbidden to take on new debts or sell assets without court permission.

If your repayment plan proposes less than full payment to any unsecured creditors you will be forced to live on a budget for the life of the plan and pay all excess income to the creditors.

Chapter 13 Bankruptcy Eligibility
There are eligibility requirements for chapter 13 bankruptcy. First you have to have a steady income because, once the debt is restructure, you will need to be able to make the payments and you will need to prove to the court that you can make the payments. If you do not have a steady income, the court may reject your request and you may need to consider Chapter 7 bankruptcy. Also important to note that if you miss any payments due under your repayment plan your case will be dismissed by the court and creditors can start collections on the remaining debt.

Chapter 13 is a good choice if you are not eligible for Chapter 7, however there are also eligibility requirements for Chapter 13. To be eligible your secured debts must not exceed $1,010,650 and your unsecured debt must be less than $336,900. These limits do vary from year to year, therefore check with your bankruptcy attorney for up to the minute details.

Information on Chapter 13 Bankruptcy Repayment Plan
Here is some information on Chapter 13 Bankruptcy repayment plans. Your monthly payments will be determined by the amount you can afford to pay after paying your necessary living expenses such as rent, mortgage, insurance, food, etc. Typically the length of repayment is for 3 year or 36 months, however the length can be as long as 5 years or 60 months but no longer, the entire process will be carried out under supervision of the courts.

The plan must show that any disposable income you have left after making these required payments will go towards repaying your unsecured debts, such as credit card or medical bills. You don't have to repay these debts in full (or at all, in some cases). You just have to show that you are putting any remaining income towards their repayment.

There are certain debts that you must pay in full. Often referred to as priority debts, these debts include child support, alimony, wages owed to employees and tax obligations.In addition to the payments in your repayment plan, you must stay current on any secured debt obligations you have such as your home mortgage or car loan. However in some cases it is possible to eliminate liens from your mortgages and restructure mortgage and other payments.

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