Chapter 13 Bankruptcy
Chapter 13 allows you to repay some or all of your debts, often at a lower interest rate. This is your best option if you:
- Are facing repossession or foreclosure and want to keep your car or home.
- Need to pay back child support or taxes but are unable to do so.
- Have a strong desire to pay your debts and not erase them under a Chapter 7
To file a Chapter 13, you must have a source of income. This can come from your job (including self employment and seasonal work), commissions you earn, pension payments, Social Security benefits (including disability), unemployment benefits, child support or alimony, royalty payments, funds from the sale of property.
How does Chapter 13 work?
- Contact an associate at Luftman, Heck and Associates for a consultation. Bring records of all your debt and proof of your income.
- Your attorney will file your case with a proposed plan. Once this is done, your creditors must stop any collection and/or repossession efforts.
- You will have meeting with the Chapter 13 trustee. At this meeting, you debtors may appear to protest the payback amount. The trustee may ask you several questions.
- A court date is scheduled, usually about a week after the meeting. At that time the trustee will approve or disapprove your plan.
- You must begin making payments immediately. The payments will come from your personal account until a wage deduction is in place.
Chapter 13 Facts.
- The debtor has five years to pay the debts.
- The trustee will pay the debts in order of priority. If your home or car were part of your plan, those notes will be paid first. Tax and child support obligations are followed by unsecured debt.
- Once the debtor finishes the plan, the rest of the unsecured debt is discharged.
- If you are a sole proprietorship, you cannot file a Chapter 13 bankruptcy. But you can file as an individual and list business-related debts.
- You cannot file for Chapter 13 if your secured debts exceed $1,010,650.
- Your income tax filings must be current.
The Law Firm of Luftman, Heck & Associates, LLP is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The information provided on the web site is not, nor is it intended to be, legal advice or an offer to represent you.
