What does Chapter 13 involve?

A Chapter 13 bankruptcy, often called a “wage-earner plan” or “debt consolidation,” involves your participation in a minimum 36-month payment plan where you repay a certain percentage to your unsecured creditors (you may think of Chapter 13 as a “partial bankruptcy.”) As more is involved in Chapter 13 than a straight bankruptcy, folks normally only file under this Chapter if they have a problem that is not solved by a Chapter 7.

In Chapter 13 cases, which last from 3 to 5 years, we propose a monthly payment plan to the Court. The amount of your payment and the length of the Plan depend on the type of debts you have and your income. Fortunately we have great experience in the Chapter 13 process which permits us to come up with a Plan that will be both affordable to you and acceptable to the judge. We rely on our long relationships with the Court and the Chapter 13 Trustee to create smooth sailing through this process.

The aim of Chapter 13 is to give you a payment that you can afford that repays only a portion of your debts. At the conclusion of your case, the remainder of your unsecured debts are discharged (canceled). Chapter 13 can prevent a foreclosure and permit you to catch up on back house payments. It can lower most vehicle payments. It can discharge certain types of debts not dischargeable in Chapter 7, particularly certain taxes. As to debts that cannot be discharged, Chapter 13 can still protect you from creditor harassment or lawsuits while permitting you to pay the nondischargeable debts over the course of your Plan. While Chapter 13 is more involved than Chapter 7, it can solve many problems beyond the scope of a straight bankruptcy.