WHAT EXACTLY IS A CHAPTER 13 BANKRUPTCY?
Chapter 13 bankruptcy is a repayment plan filed by individuals who wish to save a valuable asset; usually a home. During the plan, the debtor keeps current payments current, and also makes monthly payments toward past due balances. Debts are prioritized, and secured creditors get paid first. Remaining disposable income goes to pay unsecured creditors, in a hierarchy established by the Bankruptcy Code. If all payments have been made as scheduled, unsecured debt remaining at the end of the plan may be discharged. This means it is possible to obtain some benefits of the classic Chapter 7 “fresh start” bankruptcy within the Chapter 13 while also saving your home! Since the plan will require regular monthly or bi-weekly payments, Chapter 13 is usually only appropriate for an individual debtor who has a regular source of income. WHO MIGHT BENEFIT FROM CHAPTER 13? People with: • Mortgages, car payments, or other secured loans they would like to bring current, so they don’t lose the property a
