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Chapter 13 Bankruptcy
[ Chapter 13 Overview ]
[ Advantages to Filing a Chapter 13 ]
Chapter 13 Overview:
As an alternative to Chapter 7, debtors may elect to file under Chapter 13 of the U.S. Bankruptcy Code. Chapter 13 bankruptcy is normally appropriate for debtors who have regular income, some of which is disposable. Disposable income is net income minus reasonable and necessary living expenses. Chapter 13 allows a debtor to restructure his or her debts by submitting a plan with the bankruptcy court and agreeing to pay the debtor's disposable income to the bankruptcy trustee over a period of 36-60 months. During a Chapter 13 case, the debtor must pay all of his or her disposable income to the Chapter 13 trustee on a monthly basis for at least 36 months, unless the debtor intends to pay all of his or her creditors back in full. At the end of the plan period, any debt that has not been paid back through the Chapter 13 trustee will be discharged much as in a Chapter 7 bankruptcy. Chapter 13 cases must run 36 months in order for the debtor to receive a discharge of dischargeable unsecured debts. A Chapter 13 plan will normally only be allowed to run less than 36 months if the debtor is able to pay his or her debts back in full during the life of the Chapter 13 plan in what is known as a "100% plan".
Advantages to Filing a Chapter 13 Bankruptcy:
There are a number of advantages to a Chapter 13 case over a Chapter 7 for the individual debtor. In a Chapter 13 case, while a residential home mortgage normally may not be modified, a debtor in arrears on his or her mortgage payment is allowed to pay that arrearage back through the Chapter 13 plan. This is true as long as the debtor is able to begin making the normal mortgage payment once the debtor's case is filed. In addition, in a Chapter 13 case, certain secured loans such as loans on automobiles are allowed to be paid back based upon the fair market value of the secured property and at the trustee's interest rate as adopted by local rule.
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OR EXPLANATION, INCLUDING HOW THE BANKRUPTCY LAWS RELATE TO YOUR
SPECIFIC CASE.
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Barlow and Niffen, P.C. is a debt relief agency as defined by the bankruptcy code. Barlow and Niffen, P.C. helps people file for relief under the bankruptcy code.
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