Email this page to a friendIn Depth Chapter 13 Bankruptcy Information
Bankruptcy Information – Chapter 13 – reorganization or consolidation
A Chapter 13 Bankruptcy is typically referred to as a reorganization or consolidation bankruptcy. A Chapter 13 takes all of your debts and puts them into one monthly payment. This consolidation plan will allow you to make one payment to all of your creditors through the bankruptcy court. There are many reasons why a Chapter 13 may be the best option for you.
Bankruptcy Information – Behind on car or mortgage payments
One reason why a person may need to do Chapter 13 is because they are behind on their payments of a secured debt that they wish to keep. In most instances, these debts are either cars or houses. If you are behind on your mortgage or car payment and wish to keep these items, a Chapter 13 will allow you to consolidate your payments or balances into one payment through the court. This will allow you time to get caught up on mortgage payments through the plan, or to consolidate the entire car payment into a manageable monthly payment along with the rest of your debts.
Bankruptcy Information – Non-dischargeable debts in Chapter 7
Another reason why you may need to do a Chapter 13 is because you have debts that cannot be discharged in a Chapter 7 bankruptcy. These debts are considered non-dischargeable, which means they cannot be eliminated through a Chapter 7. In some cases, debts are discharged through chapter 13 that can not be discharged through chapter 7. The most common example is divorce property settlement debts. If you owe your ex-spouse for payment of marital debt, you can not discharge this obligation in chapter 7, but in a chapter 13 you can. Even in cases where debts are non-dischargeable in either chapter 7 or chapter 13, such as student loans, some tax debt, some government fines, and child support arrears you can still consolidate these through a chapter 13 plan. If your main problems are these types of debts, a Chapter 13 may be the best option for you. A Chapter 13 will allow you to consolidate these debts into a manageable payment plan that will satisfy your creditors and protect you from wage garnishments, judgments and liens. These are all debts that a Chapter 7 Bankruptcy cannot give you relief on.
Bankruptcy Information – Income level may determine bankruptcy type
Your income level may be another reason to file a Chapter 13. Some people cannot file a Chapter 7 because bankruptcy law provides that if you have the means to pay some creditors back, then it is considered an abuse to file under chapter 7. Each state has income thresholds based on your family size. For some people that have means to pay some bills back, but not all of them outside of bankruptcy, a Chapter 13 would benefit you. A Chapter 13 will allow you to get into a payment plan where you are able to pay your creditors back at a percentage of what is owed to them. This percentage is determined based on your ability to pay and can theoretically be 0-100% of the amount owed to unsecured creditors. This percentage is also affected by assets you may own. The reason a Chapter 13 is your best option is because it allows you to get into a definitive payment plan based on what you can afford and once the payment plan is complete, any remaining balance on most unsecured debt is discharged!
Bankruptcy Information – Chapter 13 lets you protect some assets
Another reason to file a Chapter 13 is if you have assets that may be seized if you try and file a Chapter 7 bankruptcy. Each state has exemptions to allow you to protect some assets when filing a bankruptcy. In some instances, these exemptions will not protect all of the assets you wish to keep. These instances may include equity in real estate, cars, retirement plans and life insurance policies. To determine if you will have any issues with these assets when attempting to file a bankruptcy, it is best to discuss your case with a qualified attorney. But, a chapter 13 is not a liquidation. Thus, any non-exempt assets can be protected while still getting relief from debt in chapter 13.
Bankruptcy Information – Contact a lawyer for additional information
There are other reasons to consider a filing a Chapter 13 and they include prior bankruptcy filings and transfer of assets issues. The best way to determine what is the best option for you is to contact Legal Helpers to get more bankruptcy information and discuss your situation. Legal Helpers can be reached at 888.743.5787.
