A chapter 13 bankruptcy is a powerful debt repayment plan that allows people with regular income to propose a plan to catch up on past due balances and repay all or part of their debts.
Chapter 13 bankruptcy can solve serious debt problems that a Chapter 7 bankruptcy doesn’t help with. For example, Chapter 13 bankruptcy is a great solution for:
- stopping home foreclosures
- preventing vehicle repossessions
- alimony and child support arrearages
- past due student loans
- back taxes
A typical Chapter 13 bankruptcy repayment plan is 36 to 60 months long. During that time, you make a monthly payment to the Chapter 13 trustee who then divides that payment among your creditors according to the court-approved repayment plan.
The Chapter 13 plan payment is based on what you can afford to pay each month not on what your creditors want you to pay.
The Chapter 13 plan prioritizes your debts with your secured creditors getting paid first. Any remaining money is paid to your unsecured creditors in a pecking order established by the Bankruptcy Code.
And during the life of the Chapter 13 repayment plan, your creditors generally must stop all collection activity against you including phone calls, letters, law suits, wage garnishments and income tax refund intercepts.
If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.
{ 8 comments… read them below or add one }
My home is in foreclosure. I hired a litigation team who has tried endlessly to work with my lender – to no avail. It appears the only option I have left is to file a motion to file Chapter 13. My lender refuses to work on a loan modification even tho I qualify. My auction is scheduled for July 21, so I need some answers ASAP.
Roxanne,
Thank your for your comment. I have called you directly to discuss your situation.
If I file Chapter 13 bankruptcy, do I have to include my house loan and car loan or can I just file on my credit cards and personal loans?
Shonna,
When you file any type of bankruptcy, you must disclose all of your debts no matter how small and no matter to whom they are owed. It’s all or nothing. So yes, your house and car loans would have to be included.
Here’s a recent blog post that I wrote on this very issue.
Dan Nunley
Is it too late to file Chapter 13 bankruptcy if a foreclosure sale date is set?
Sam,
In Oklahoma, as long as you file a Chapter 13 bankruptcy before the hearing confirming the foreclosure sale, the sale is void and will be vacated and you will have the opportunity to cure the mortgage delinquency through the Chapter 13 plan.
Dan Nunley
I was wondering how much time has to elapse in order to file a Chapter 13 Bankruptcy after a Chapter 7 Bankruptcy has been discharged. Thank you.
Gayle,
There is no waiting period in order to file a subsequent bankruptcy case. You can file a Chapter 13 bankruptcy immediately after a Chapter 7 bankruptcy. However, there is a waiting period in order to be eligible for a subsequent bankruptcy discharge. If you previously filed Chapter 7 bankruptcy and received a Chapter 7 discharge, then you will not be eligible to receive a Chapter 13 discharge if you file your Chapter 13 case before four years have elapsed from the date you filed your previous Chapter 7 case. Sometimes it makes sense for a person to file bankruptcy even when he or she is not eligible for a bankruptcy discharge. However, for the vast majority of people, the main reason they file bankruptcy is to receive a discharge of debts and it would not be in their best interest to file bankruptcy before they were eligible to receive a discharge.
Dan Nunley