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The Purpose Of A Chapter 13 Bankruptcy

A Chapter 13 bankruptcy is designed for people who are looking to keep their property and repay their bills. A Chapter 13 bankruptcy requires a regular or steady income that can be used by the debtor as a framework from which to create a budget. With this budget in place, the debtor can then begin to reliability make payments each month back to the trustee.

Who Should File Chapter 13 Bankruptcy?

This type of bankruptcy is ideal for people who have fallen behind on either mortgage or automobile payments and are unable to “become current” on the past payments due. A Chapter 13 bankruptcy is a consolidation of debts into one repayment plan and allows the debtor to reorganize the debts and pay some or all of the unsecured debt without any further interest accumulating. It most often allows the debtor to keep their house or car and pay off their mortgage or car loan in smaller increments.

How The Process Works

In a Chapter 13 bankruptcy, the debtor proposes a full or partial repayment plan which is administered by the bankruptcy court. The debtor makes monthly payments in accordance with the plan to the trustee’s office, and the trustee makes payments to the creditors. The repayment period may be from three to five years, depending on the debtor’s disposable income.

  • Once a Chapter 13 bankruptcy is filed, there will be a mandatory court hearing scheduled approximately four to six weeks later.
  • At this proceeding, the trustee will ask the debtor a series of questions and go over the terms of the proposed plan.
  • The proceeding usually only takes a few minutes and the debtor’s attorney will also be present.

A Chapter 13 bankruptcy can be complex, and every case is different. It is very important that the debtor retain a trusted and reputable attorney who will maintain continuous contact with the debtor throughout the course of the plan. If you do not have a steady income or job, filing for Chapter 7 bankruptcy may be the better option. Filing for bankruptcy will affect your home and marriage.

Get The Knowledgeable Guidance You Need

It can be frustrating to see all of your hard-earned money fly out the door each month to pay off increasing debt. Chapter 13 bankruptcy was created to help people like you who have a decent job but are buried under mounting interest and credit card, medical or mortgage bills.

To find out how to get started or just get some questions answered, call 712-847-5882. I can also be reached via website inquiry email. Send me a line or two about what you are dealing with and I will get in touch about your options. As firm principal and an attorney focused on bankruptcy, I offer personal, attentive and accessible service to each and every client I serve.

I am a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.