Chapter 13 bankruptcy is a court supervised reorganization and repayment plan that permits individuals and married couples who have a steady and reliable source of income to propose a plan to their creditors to repay some or all of their debt over time, usually a three to five year period. A Chapter 13 bankruptcy requires a monthly payment. The amount of the monthly payment depends upon the household income and expenses as well as the type and amount of debt that needs to be paid through the repayment plan. Chapter 13 may permit you to propose a plan to cure defaults on car loans, home mortgages, student loans and child support. Filing a Chapter 13 bankruptcy can stop a Sheriff’s sale of real estate, rescue a home from foreclosure and permit repayment of the missed mortgage payments over time. You may be able to eliminate second mortgages and combine payments on cars and other secured debt into one affordable monthly payment. Depending on a person or married couple’s circumstances it is possible that some debt (unsecured debt) can be eliminated without a substantial amount of that debt being repaid. Like a Chapter 7 bankruptcy, filing a Chapter 13 bankruptcy stops wage garnishments as well as other collection activities. In the end, for most Chapter 13 bankruptcy candidates, a discharge eliminates unsecured debts not paid during the term of the Chapter 13 bankruptcy.
If you have questions about whether Chapter 13 bankruptcy is an option for you, the experienced bankruptcy attorneys at Kinkade & Associates would be pleased to meet with you and discuss your situation. Your FREE consultation with a local bankruptcy attorney.