Chapter 13 Bankruptcy Explained

Chapter 13 Bankruptcy is a payment plan set up to consolidate your debt. Also known as debt restructuring, Chapter 13 allows those who are eligible to use income to gradually eliminate debt while still holding on to their home and their vehicles. The repayment plan allows you, the debtor, to catch up on house and car payments in manageable monthly amounts.

Chapter 13 puts you in control rather than mortgage lenders and other creditors. While the process often takes anywhere between three and five years to complete, filing for Chapter 13 allows you to pay off your creditors while still holding on to your home and vehicles.

Property and Chapter 13 Bankruptcy

You, the debtor, will not lose any of your property unless you choose to let the property go or cannot afford the modified repayment plan established for you. Chapter 13 is the only consumer type of bankruptcy that allows you to keep your home and/or car even if you are behind on the payments. Chapter 13 bankruptcy consolidates any payment arrearages into your bankruptcy repayment plan.

The Cost of Chapter 13 Bankruptcy

During a Chapter 13 bankruptcy proceeding, attorney fees often do not have to be paid up front. Instead, all fees are paid through your bankruptcy plan. However, if you are self-employed or opt not to have your employer deduct your bankruptcy payment from your wages and send them to the bankruptcy court, you may be asked to pay a small retainer in order to begin your case.

The Benefits of Chapter 13 Bankruptcy

While you are in Chapter 13 bankruptcy, your creditors can no longer pursue any action against you regarding repayment of debts. That means no one can call and harass you, sue you, or seize any of your property if you are in Chapter 13 bankruptcy and are making your modified debt payments to the bankruptcy court. When you finish the Chapter 13 repayment plan, you will be eligible for a chapter 13 discharge of those debts. This means that you are no longer liable for all dischargeable debts.

Going to Court

Usually you will attend a hearing known as a Meeting of Creditors. This hearing takes place approximately 45 days after you file, and your Chapter 13 trustee will swear you in and ask you questions. Our office will prepare you for your hearing upon signing your bankruptcy paperwork.

If you are considering filing for Chapter 13 bankruptcy, contact the skilled lawyers at Moore & Brooks Attorneys at Law today at (865) 450-5455.