Chapter 13 Bankruptcy

A Chapter 13 bankruptcy is one in which you are able to keep non-exempt, secured property and repay all or part of the debt for that property. In a Chapter 13, a debtor proposes a plan to pay for certain debts in a three to five year period. A Chapter 13 filing stops all creditors from foreclosing on your home, repossessing your property, suing you for debts, and garnishing your wages. In fact, individuals will have no direct contact with creditors during the entire life of a Chapter 13 plan.

A Chapter 13 plan is designed to restructure and reorganize your debts into one affordable monthly payment. A Chapter 13 plan is similar to a consolidation loan in which non-exempt, secured debts are consolidated into one payment made to the Trustee, who then distributes payments to creditors.

Chapter 13 is only available to an individual. It offers individuals several advantages over a Chapter 7 filing. Perhaps most significantly, Chapter 13 offers individuals an opportunity to save their homes from foreclosure and cars from repossession. It can also save other secured property from repossession, such as furniture, appliances, ATVs, and boats.

Persons with unsecured debts, such as credit card debts (with limited exception), are personally relieved from having to pay for those debts. Finally, the debtor chooses whether to keep property or surrender it back to the creditor. Property kept by the debtor is repaid. However, property surrendered by the debtor is treated like unsecured property and the debtor does not have to pay for the surrendered property.

The decision about whether to file for bankruptcy is a hard one. The Lancaster Law Firm is here to help. We will answer all your questions about bankruptcy and tell you whether Chapter 7, 11, or 13 is right for you. Call us today to schedule a meeting with one of our attorneys.