Bankruptcy under Chapter 13 of the Bankruptcy Code is sometimes referred to as a “wage earner plan.” Under Chapter 13, a Bankruptcy Court can help a debtor reorganize his debts and pay them off over time. Under Chapter 13, a debtor typically keeps all of his or her property. A Chapter 13 bankruptcy is available to individuals with less than $336,900.00 in unsecured debt and $1,010,650.00 in secured debt. Corporations and partnerships must use Chapter 11 to reorganize their debt.
A debtor begins the bankruptcy process by filing a petition with his local bankruptcy court. Once the petition is filed, an “automatic stay” goes into effect and the creditors are prohibited from making any attempt to collect their debt, including attempting foreclosure and repossession. Along with the petition, or shortly thereafter, the debtor files various written “schedules” and “statements” to inform the Court of his outstanding debts, his current income and expenses, any existing contracts, any current or potential lawsuits, and any recent asset transfers. Within approximately 15 days of filing the petition, the debtor submits a plan to the Court detailing how he will pay off his debts. Under the plan, the debtor must completely pay off certain “priority” debts, such as the costs of administering the bankruptcy, employees’ wages and benefits (if any), debts for undelivered services or goods (if any), and taxes, and pay for any encumbered property he wants to keep. The debtor can plan, based on his ability, to partially pay any remaining debt and ask the Court to discharge the rest. Once the Court approves a payment plan for the debtor, a Court-appointed Trustee begins collecting the debtor’s payments and administering the plan. Upon the debtor’s successful completion of the repayment plan, the Bankruptcy Court discharges any remaining debt and concludes the bankruptcy.
If you are in danger of losing your house, your car, or other property, and/or are tired of creditors’ harassment, contact us today. We can help you decide if Chapter 13 bankruptcy is for you. There is no charge for the initial consultation to assess your case.The only thing you have to lose is your debt. 1-800-436-9056