Chapter 13 Bankruptcy


There are many reasons why you may choose to file Chapter 13 instead of Chapter 7 bankruptcy:

  • You may not qualify for Chapter 7 under the means test.
  • Filing Chapter 13 bankruptcy may allow you to protect assets you would otherwise lose by filing Chapter 7 bankruptcy.
  • Chapter 13 bankruptcy gives you more time to catch up on mortgage payments to prevent a home foreclosure.
  • There are some tax debts you can discharge in a Chapter 13 bankruptcy that can’t be discharged in a Chapter 7 bankruptcy.

Creating a Debt Repayment Plan

Under your Chapter 13 bankruptcy payment plan, you will agree to pay back 100 percent of your secured debt over a three- to five-year period. Secured debt is debt backed by certain property, such as your home and your car.

After you and your lawyer have determined a budget, you will pay back a percentage of your unsecured debt such as credit card bills, lawsuit judgments, payday loans and hospital bills. This percentage will be determined by how much you can afford to pay. A Chapter 13 bankruptcy plan is a form of debt consolidation, as you will make one payment to the bankruptcy trustee, who will then pay your creditors. At the end of the payment plan, remaining unsecured debts will be eliminated and you will be up to date on your secured obligations.

What Are the Other Benefits of Chapter 13?

Filing Chapter 13 bankruptcy puts an immediate stop to:

  • Home foreclosure
  • Eviction
  • Wage garnishment
  • Repossessions
  • Harassment by your creditors

To schedule a free initial consultation with a Chapter 13 bankruptcy lawyer, call 407-480-2179.

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