Chapter 13 Lawyer

Chapter 13 bankruptcy is a legal process that allows individuals to restructure or eliminate their debts while keeping their assets. Chapter 13 focuses on creating a repayment plan that lasts three to five years.

The primary goal of Chapter 13 bankruptcy is to help debtors catch up on missed payments and regain control of their financial affairs. This type of bankruptcy is particularly beneficial for individuals with regular income who want to protect their property from foreclosure, repossession, or other legal actions.

To file for Chapter 13 bankruptcy, debtors must have a reliable source of income, and their secured and unsecured debts must fall within specific limits set by the bankruptcy code.

Secured debts, such as mortgages or car loans, are debts that are backed by collateral.

Unsecured debts, like credit card bills or medical expenses, do not have any collateral attached to them.

One of the key advantages of Chapter 13 bankruptcy is the ability to keep valuable assets, such as homes or vehicles, as long as the debtor can make regular payments as outlined in their repayment plan. This plan is determined by the bankruptcy court and is based on the debtor’s disposable income, which is the money left over after paying for necessary living expenses.

During the repayment period, debtors are required to make monthly payments to a bankruptcy trustee, who then distributes the funds to the creditors as outlined in the plan. The repayment plan typically prioritizes secured debts that are necessary for the debtor’s daily life, such as mortgage or car payments.

Unsecured creditors, such as credit card companies, may receive only a portion of what they are owed or nothing at all, depending on the debtor’s disposable income.