What is a Chapter 13 Bankruptcy?

A Chapter 13 Bankruptcy is a reorganization of your debts. They will be spread out in a payment plan that lasts 3-5 years. If you have any arrearages on your mortgage or other loans, a Chapter 13 gives you the chance to catch up gradually.

How does a Chapter 13 Bankruptcy work?

Your payment plan will be determined using your income, reasonable expenses for your family size, and the amount of debt. Any outstanding balance on your vehicles, a fee for the trustee, your arrearages, your attorney’s fees, and a portion of your unsecured debts will be included.

Which debts get paid in a Chapter 13?

Your past-due mortgage and car payments are included, along with a portion of your dischargeable debts. Non-dischargeable debts such as taxes can also be worked into your Chapter 13 plan.

What is the difference between a Chapter 13 and a Chapter 7 Bankruptcy?

A Chapter 7 simply discharges your debts instead of requiring you to be on a payment plan. However, there are strict income and asset value requirements in a Chapter 7. If you have filed a Chapter 7 bankruptcy in the past 8 years, you are only eligible for a Chapter 13 bankruptcy.

Who is a Chapter 13 trustee?

The trustee serves as a role similar to a referee in your bankruptcy. They will analyze your petition and request supporting documents to make sure you didn’t fail to disclose any assets or income. They can seize non-exempt assets and sell them to contribute to your bankruptcy estate.

 How much does it cost to file a Chapter 13?

The court filing fee for a Chapter 13 is $310. Fees for legal representation will vary on you area, the attorney you choose, and the complexity of your case.

Can I pay my taxes or student loans in a Chapter 13?

You can pay these debts in a Chapter 13, but you won’t be required to pay the full balance in the 3-5 year lifespan of your plan.

How much of my debt will I have to repay in a Chapter 13?

You could end up paying some, all, or none of your unsecured debts in a Chapter 13 bankruptcy. It will depend on the amount of debts you have and your disposable monthly income. A bankruptcy attorney should be able to provide you with a range to expect in a consultation.

How is a Chapter 13 plan confirmed?

Your attorney will submit your bankruptcy petition with a proposed bankruptcy plan, which must be confirmed by the trustee. The trustee will analyze your petition and determine how much disposable income you have at the end of the month after deducting reasonable expenses. The trustee will only approve your plan if they think it is feasible.

Who is eligible to file for Chapter 13 bankruptcy?

There are some limits on how much debt you can have to file a Chapter 13 bankruptcy. The limit for unsecured debts is $394,725. The limit for secured debts is $1,184,200. Secured debts are those attached to assets, like a mortgage or a car loan.

How long is the repayment process in a Chapter 13?

Your payment plan will be 3-5 years.

 What is a Chapter 13 Bankruptcy plan?

A Chapter 13 bankruptcy plan is the monthly amount you will pay to your bankruptcy trustee. Your trustee will confirm your plan before you begin payment after they analyze your income and reasonable expenses to make sure you can afford the payments. The plan will last 3-5 years.

Can I file Chapter 13 jointly?

Yes. Filing jointly allows married couples to deal with debts incurred both before and during the marriage.

Which debts are discharged in a Chapter 13 that aren’t discharged in a Chapter 7?

Arrearages on past-due payments such as your mortgage are spread out through your payment plan but not addressed in a Chapter 7. Debts due to willful and malicious property damage can be discharged in a Chapter 13 but not a Chapter 7. You also can’t discharge debts incurred to pay non-dischargeable tax debts in a Chapter 7. In a Chapter 13, you can discharge debts that were assigned to you in a divorce. Some government fines, such as property taxes,  and  certain obligations to your city or county. Debts that weren’t successfully discharged in a previous bankruptcy and stripped liens may be dischargeable in a Chapter 13 as well.

Are student loans dischargeable in a Chapter 13?

You can pay on your student loans in a Chapter 13, but the remaining balance won’t be discharged at the end of your payment plan.

What happens at the end of a Chapter 13 repayment?

As long as you took your credit counseling courses, once you finish the payment plan, your case will be discharged.

What is a Chapter 13 discharge?

Once you complete all the payments in your plan, you are eligible for discharge. This means your bankruptcy is completed and any debts you included in the bankruptcy plan are settled. In a Chapter 13, a portion of your unsecured debts may be discharged at the end of the plan.

We are facing foreclosure. Will a Chapter 13 save my home?

If you are a few months or more behind on your mortgage payment, filing a Chapter 13 bankruptcy will allow you to spread those past-due payments out over a 3-5 year period. The automatic stay that is provided once you file will stop any impending foreclosure, and as long as you make your plan and mortgage payments, you will keep your home.