Chapter 13 bankruptcy, known as the “Wage Earner Bankruptcy,” is designed for people (including married couples) who are able to repay a portion of their debts over time.
When you file a Chapter 13 bankruptcy you will propose a repayment plan to make installments to creditors over three to five years. The time period depends upon whether your current monthly income is less than the applicable state median.
Creditors are not allowed to start or continue collection efforts against you while you’re in Chapter 13 bankruptcy. Even better, if your spouse is in Chapter 13 bankruptcy and you have a joint debt, the creditor cannot start or continue collection efforts against you – that’s called the “co-debtor stay,” and it’s a powerful tool in Chapter 13.
Most individuals who seek protection under Chapter 13 of the U.S. Bankruptcy Code are those who:
- own property that would not be considered exempt under Chapter 7 bankruptcy;
- have a past due balance on a mortgage or car loan and want to repay those past due balances over
time without fear of foreclosure or repossession;
- have debts such as student loans that would not be discharged under a Chapter 7 bankruptcy; or
- have Disposable Income (as it’s defined by the bankruptcy laws) sufficient to repay a portion of their debts over a three year period of time (this period is five years for people who do not qualify for Chapter 7 bankruptcy).
Under Chapter 13 you are given the opportunity to catch up on past due mortgages, car loans and rent payments. In addition, if you repay your debts through Chapter 13 you are given a predictable payment plan that your creditors are required to accept.
The major difference between Chapter 13 and debt consolidation is that Chapter 13 gives you the protection of the U.S. Bankruptcy Code to protect yourself from continued interest, late fees, and credit harassment.
Get More Information About Chapter 13 Bankruptcy . . .
Why File For Chapter 13 Bankruptcy Instead Of Chapter 7 Bankruptcy?
Do I Qualify For Chapter 13 Bankruptcy?
Chapter 13 Plan – What Is It, And What Does It Do?
Do I Have To Go To Court For My Chapter 13 Case?
Will My Chapter 13 Plan Be Confirmed?
Will I Lose My Property In Chapter 13?
How Long Does Chapter 13 Last?
Is It Better For My Credit To File For Chapter 13?
When you’re ready to get out of debt and get a fresh financial start, all you need to do is contact me or click at the top of this page to set up a free, no-obligation phone consultation.