Are your debts piling up so high that you’ve started to avoid answering the phone to avoid creditors? There is a solution to getting creditors off your back while you restructure your finances to get out of debt – Chapter 13 bankruptcy.

Learn how Chapter 13 bankruptcy works, and if it’s the right solution for you.

End Harassment From Your Creditors

Under Chapter 13 bankruptcy, you are typically allowed to keep your house and assets. With this form of bankruptcy, you submit a payment plan to the court and agree to repay your debts under that schedule. Once this is approved, your creditors are notified by the court and they must cease all contact with you immediately. Your creditors will be paid from the monthly payments you make according to your repayment plan.

Benefits of Chapter 13 Bankruptcy

If you earn a significant income, or if you have property you want to protect, Chapter 13 bankruptcy can be the right solution for you. This option provides many benefits, including:

  • Lets you stop foreclosure
  • Allows you to keep your home
  • Ends harassing contact from creditors
  • Stops creditors from taking collection actions
  • Lets you can restructure your finances
  • Permits you to re-pay your creditors
  • Allows you to obtain future credit lines

Who’s Eligible for Chapter 13 Bankruptcy

To file for Chapter 13 bankruptcy, you must meet certain criteria. These can include:

  • Your secured debts (property a creditor can take if you don’t repay the debt, like your house) and unsecured debts (property creditors cannot take away, such as medical bills or items bought with your credit card) cannot exceed certain amounts. If the debt is too high, you might have to look at other types of bankruptcy instead.
  • You must prove you have a steady income to be able to meet the obligations of your repayment plan, in addition to affording your current living expenses. Your repayment plan will not be approved if your income can’t cover all of your financial obligations.
  • You must be filing as an individual, as businesses are not eligible to file for Chapter 13.

Steps to Filing Chapter 13 Bankruptcy

You must follow a detailed process when filing for Chapter 13 bankruptcy. Your attorney will help guide you through the steps. Some of these can include:

  • Paying mandatory bankruptcy filing fees.
  • Attending a required credit counseling class from a court-approved organization. This class is meant to help you determine if you have the necessary income to pay off your debts. You must submit a certificate of completion to the court.
  • Submitting a repayment plan to the court. This is your proposal for how you will repay your debts. You will present this to the court and your creditors, and your creditors will have an opportunity to review and object to your plan. The plan must be confirmed by the court during a confirmation hearing.
  • Waiting for the court to review the repayment plan. It will ensure the plan is not trying to manipulate the bankruptcy process, that it complies with the bankruptcy laws, and that you have the means to make the payments.
  • Completing the repayment plan in 3 to 5 years. Once it is completed, the remaining debts may be discharged.

Types of Debts You Will Repay Under Chapter 13 Bankruptcy

The debts you will repay under Chapter 13 are categorized as a Priority debt, Secured debt, and Unsecured debt.

  • Priority debt: These are debts that you must repay in full. This can include child support, alimony, and taxes.
  • Secured debt: These include property you will need to keep making payments on, including your house or car.
  • Unsecured debt: These are debts you won’t have to fully repay, or potentially not repay at all. This can include credit card debt and medical bills.

To learn more about Chapter 13 bankruptcy and whether it is the right option for you, it’s crucial to hire an experienced attorney to help you through the process. Don’t let debt ruin your life. Call (405) 529-9377 for a free case review.

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