Chapter 13 Bankruptcy

Chapter 13 bankruptcy is different from a Chapter 7 bankruptcy. A Chapter 13 bankruptcy is for those debtors who do not qualify for a Chapter 7 due to the “means test”, or for those debtors who do qualify for a Chapter 7 but have chosen to file for Chapter 13, usually because of a need to save a home from foreclosure or to prevent the Trustee from taking and liquidating some assets that the debtor wants to keep and would lose in a Chapter 7.

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REPAYMENT PERIOD

While a Chapter 7 bankruptcy is referred to as a “liquidation” bankruptcy, Chapter 13 bankruptcies are referred to as “repayment” bankruptcies. This is because debtors are required in a Chapter 13 bankruptcy to repay a portion of their debts over a period of either 3 years or 5 years. Whatever unsecured debt is left at the end of the repayment period is discharged with some exceptions. We can help you determine which repayment period for which you qualify.

AUTOMATIC STAY/MEETING OF CREDITORS

The automatic stay provisions for a chapter 13 are almost identical to those for a Chapter 7 with one big exception. The automatic stay protects the debtor from creditor collection activities, but what about if there is a codebtor? The automatic stay only applies to debtors in a Chapter 7, but in a Chapter 13 it also protects codebtors. This can be a big consideration for debtors filing for bankruptcy that have relatives as codebtors.

MEETING OF CREDITORS
  • Just like a Chapter 7, a debtor in a Chapter 13 must also attend a 341 Meeting of Creditors with a Trustee.
  • The creditor meetings are nearly identical in nature.
  • We will always attend the 341 Meeting of Creditors with you and prepare you before your meeting so you know what to expect.

REPAYMENT PLAN

While the time consuming process of either a Chapter 7 or Chapter 13 is the accurate preparation of the bankruptcy petition, the most complicated process is calculating the repayment plan for a Chapter 13. The repayment plan must meet several factors before the Trustee and the Court will agree to it and the calculations can be extremely difficult to understand. Certain debts must be paid in full while others can be paid back pennies on the dollar. Debtors want the monthly repayments to be as low as possible, while the Trustee tries to make it as high as possible. Debtors need an attorney that understands how to keep the payments low and how to negotiate with the Trustee. We are experienced with drafting Chapter 13 repayment plans and know the Trustees. We can even give you a good idea of what your repayments will look like before you even file.

DISCHARGE

Once all the payments have been made successfully in a Chapter 13 repayment plan, the debtor applies to the Court for a discharge of the remaining debt. This gives debtors the fresh start needed to begin again and get back on their feet.

COST

Because Chapter 13 bankruptcies are much more complicated and time consuming than Chapter 7 bankruptcies we usually charge for them on an hourly basis rather than flat fee. However, in some cases a flat fee can be set up if the case is right. Give us a call to set up a free consultation. Once we learn the facts of your case we can determine if a flat fee is available or if an hourly rate is necessary. Either way, it costs you nothing to find out.

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