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Chapter 13

In a Chapter 13 case, an individual with regular income repays all or a portion of his or her debts over a three-to-five-year period through a monthly payment plan approved by the Bankruptcy Court. For that reason, a Chapter 13 case is sometimes referred to as a "wage-earner plan." Also, many sole proprietors file Chapter 13 plans to restructure how their debts are repaid. The Chapter 13 Trustee does not take possession of non-exempt assets but supervises the case and administers the payments to creditors under the Chapter 13 plan. In exchange for these payments, you can keep property you have which a trustee would sell from under you in chapter 7 bankruptcy. So in chapter 13, you can:

  • Save your house
  • Keep your car
  • Keep your property
  • Save your business

The amount of your plan payment and the length of your plan depend on a number of factors. One factor is how much disposable income you have left over every month after you pay your living expenses. A second factor is how much you are behind on your secured debts (e.g., mortgage, car payment, etc.)

The most common reasons for consumer bankruptcy are (a) loss of a job or long-term layoffs; (b) loss of overtime hours; (c) lengthy illnesses and large medical expenses; (d) death or disability of a spouse; (e) separation, divorce and marital problems; (f) seriously over-extended credit; and (g) large unexpected expenses.

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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. The Cook Law Firm, APLC is not engaged in rendering legal or other professional services by posting said material.