This allows debtors to repay their debts slowly over a period of time. Your attorney can negotiate a manageable monthly payment amount with your creditors. The repayment process usually takes three to five years.
We are here to guide you through every step of the process to a strong, secure financial future. Please don’t hesitate to go over your options with a dedicated bankruptcy lawyer. With us, all your meetings will be with an attorney, not a paralegal or legal secretary, so you always get qualified legal counsel.
Filing for Chapter 13 is often referred to as individual debt adjustment or a wage earner plan. Petitioners are required to come up with a repayment plan to repay their unsecured debt. Your court-supervised payment plan is based on your family’s income, expenses, and your disposable income. You must pay your creditors in full or until five years have passed, whichever comes first. It is helpful to speak with an attorney before you file to see if this option is beneficial to you in the long run.
The debt limits for Chapter 13 are $360,475 for unsecured debt and $1,081,400 for secured debt. When you file for Chapter 13 bankruptcy, it starts with filing a petition with your local bankruptcy court. After the petition has been filed, creditors are prohibited from contacting you and attempting to collect debt. This is called an “automatic stay” and includes attempts of repossession and foreclosure. From there, you must present information about your existing debts, expenses, and income. After you have submitted this information, you must submit a plan to the court about how you will pay your debts. You can count on us to help you with all of these steps.
Chapter 13 may offer some benefits over Chapter 7. In Chapter 13, debtors are allowed to modify or eliminate some secured debts. Chapter 13 can also stop a foreclosure, allowing you to catch up on any overdue mortgage payments. This type of bankruptcy even allows you to eliminate some unsecured debts that Chapter 7 can’t. Chapter 13 may not be for everyone, so consult an attorney for help.`
In some cases, you may be able to discharge federal income taxes under Chapter 13. The income taxes that Chapter 13 cannot discharge are considered as priority debt and must be repaid in full. Income taxes that you owe to the
IRS can be paid with no penalties or interest.
The Chapter 13 trustee’s role is different from the Chapter 7 trustee. The Chapter 7 trustee is tasked with locating and gathering a debtor’s non-exempt assets, and he or she can object to the debtor’s exemption claims. In Chapter 13, the trustee mainly supervises the debtor’s case and approves the plan. After approving a plan, the trustee then collects payments from the debtor and distributes them to creditors.