What is Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts. • What is Chapter 13 and when can it be used? Individuals may file chapter 13 bankruptcy petitions if they: • Reside, have a domicile, a place of business, or property in the United States, or a municipality; • Have a source of regular income; and on the date the petition is filed owe less than $290,525 in unsecured debts and less than $871,550 in secured debts. Note: The amounts given here are 2001 amounts. They are regularly adjusted to keep up with the cost of living. Corporations and partnerships may not file a chapter 13
A Chapter 13 bankruptcy is significantly different from a Chapter 7. It is a repayment plan lasting three to five years, depending on your income level. You pay off your debts in full or in part, based on your ability to pay. At the end of the case, all the balances on your debts are discharged, even if they have been only partially satisfied, except your mortgage, student loans, child support, and some other exceptions. Most Chapter 13 cases are partial payment cases. Normally, you continue paying your house and care payments. The rest of your debts are put into the Chapter 13 plan. This means you do not normally lose anything you own. You should consider filing Chapter 13 if: • Your are behind on house or car payments, and need time to catch up; • You are behind on other debt payments, and need time to catch up; • You have valuable property you would lose in a Chapter 7 and instead can make payments to your creditors over time. You can call our office now to find out whether Chapter
Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts. More information on Chapter 13.
Chapter 13 Bankruptcy allows a debtor with a regular source of income to create a repayment plan and regularly pay towards reducing a debt. At first glance, a Chapter 13 bankruptcy appears less desirable than a Chapter 7 filing because Chapter 13 requires ongoing payment into a plan whereas Chapter 7 simply eliminates dischargeable debts. Often, a Chapter 7 filing is more favorable. An experienced Denver Bankruptcy attorney will fully explain to you the differences between a Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Nonetheless, Chapter 13 has numerous benefits.
Chapter 13 bankruptcy is a debt repayment proceeding. The debtor turns over a specified portion of his/her future earnings to the Chapter 13 trustee, who then distributes dividends to creditors who have filed bona fide claims. The method of determining the dividend distribution is determined by the Chapter 13 Plan which is filed with the Bankruptcy Court by the Debtor. The debtor receives a discharge of all dischargeable debts.
