Chapter 13 Consumer Bankruptcy

“Reorganization”

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Chapter 13

Chapter 13 allows you to discharge your unsecured debts such as medical bills, credit cards, and repossession deficiencies usually with only a small percentage being paid to the creditors.  It also allows you to pay off missed house or car payments over a 3 to 5 year plan.  Chapter 13 is available for both individuals and small businesses.  If you file Chapter 13, a Trustee is assigned to administer your case.  The Trustee will meet with you and your attorney in a brief meeting approximately 4 to 6 weeks after you file.  Your creditors are also invited to attend the meeting, but it is rare that one attends.  During this meeting, the Trustee will ask a few, simple questions regarding your case.  You are also required to attend an orientation class sponsored by the Trustee’s Office.  In a Chapter 13, you make monthly payments to the Trustee, who will then disburse the money to your creditors over the 3 to 5 years of your plan.  In Chapter 13, you can also pay off delinquencies to the IRS and Child Support.

 

If your house is scheduled for foreclosure or your car is threatened by repossession, a Chapter 13 will stop the seizure from the creditor and allow you some breathing room to pay off the delinquencies over a longer time period than what a creditor would normally allow outside of bankruptcy.  It can also lower your interest rate on vehicle loans and may also allow you to pay off the value of the vehicle rather than the balance owed, possibly saving you thousands of dollars.

 

The Chapter 13 Plan can be set up for 3, 4 or 5 years.  Depending on your situation, you may pay only 1 percent or 100 percent back to your unsecured creditors.  To find out if Chapter 13 is right for you, call us for a FREE CONSULTATION.

 

Keeping Your Assets

In a Chapter 13, it is rare that a person loses any assets.  The Courts do, however, require you to pay a certain amount of money to your creditors if you have non-exempt property that you wish to keep.  We will be happy to meet with you to discuss your assets and determine whether it is exempt or not.

 

Lawsuits & Judgments

If a creditor has filed a lawsuit or even received a judgment against you for a credit card, medical bill or repossession, you can still normally discharge these debts through a bankruptcy.

 

Stop Creditor Harassment

Once your creditors receive notice that you filed Chapter 13, they must stop contacting you immediately.  They can no longer make those harassing phone calls, write threatening letters, sue you or try to seize your property.  If they do continue any collection activity against you, you have the right to sue them in federal court for monetary damages.

 

 

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