What Is Chapter 13 Bankruptcy?

Chapter 13, also known as the "wage earner's plan," is a form of consumer debt reorganization that allows debtors to restructure payments by combining many debts into a "plan." Debtors then make one monthly payment for all of the debts included in the plan to the Chapter 13 trustee.

Not all debts, however, follow this rule. Mortgage payments, for example, will often need to be made directly to the creditor "outside" of the plan. However, if there are mortgage arrears, those will be included in the plan, as long as future payments due under the loan are provided for in the plan as well.

In most Chapter 13 cases, debtors get to keep their property while making payments to the trustee out of a debtor's future income. These payments must pay all or a portion of the debt over the life of the plan.

You should consult a bankruptcy attorney with experience handling Chapter 13 cases before deciding if this avenue is right for you. Contact us at the office of Debra Booher & Associates now to get answers to your questions.

When Is Filing Chapter 13 Bankruptcy Appropriate?

Chapter 13 bankruptcy may be appropriate if you have:

  • Fallen behind on a secured loan for a home, vehicle or other piece of property and are facing the possibility of repossession or foreclosure,
  • Nonexempt property that is eligible for protection under Chapter 7 bankruptcy
  • Enough disposable income to pay back a major portion of your debt over the course of time

There are a lot of factors that determine qualification for Chapter 13 as well as whether or not a debtor should pursue a bankruptcy petition.

What Happens To Your Property?

Even though a debtor going through Chapter 13 gets to keep his or her property, exempt property is still used to determine if a repayment plan complies with the Bankruptcy Code.

If you file Chapter 13 repayment, you should know that creditors are entitled to, by law, at least as much under your repayment plan as they would receive from Chapter 7 liquidation. Whatever you would have received through Chapter 7 liquidation needs to at least match your payments under a Chapter 13 plan in order to comply with the Bankruptcy Code.

Contact Our Chapter 13 Lawyers Now

The time to take control of your debt is now and the skilled bankruptcy attorneys at Debra Booher & Associates can help. We are one of the leading consumer bankruptcy law firms in northeastern Ohio, filing more than 2,000 bankruptcy cases per year for clients throughout the region.

Call 888-542-1300 or contact us online to speak with an experienced consumer bankruptcy lawyer today.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.