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Chapter 13

Chapter 13 bankruptcy is one of the more commonly used bankruptcy chapters, along with Chapter 7. Under a Chapter 13 bankruptcy, also known as wage earner’s bankruptcy, a debtor proposes a reasonable payment plan and is allowed to repay his or her debt over an extended period of time, generally three to five years. This lengthy time period is due to the fact that Chapter 13 involves regular monthly payments to the Chapter 13 trustee for the plan period. The Chapter 13 plan, or simply the payment plan, is how Chapter 13 works. Chapter 13 is an attempt to “reorganize” an individual’s debt by paying certain creditors over a period of time.

Chapter 13 bankruptcy is particularly helpful for debtors who are facing foreclosure of their home or repossession of their vehicles. A Chapter 13 payment plan allows debtors to get caught up on missed mortgage payments over an extended period, which can ease the financial burden of doing so. In the case of a vehicle loan, a Chapter 13 payment plan will allow a debtor to repay the balance of the loan in fixed payments over the course of 60 months and may limit the interest on the loan. The result is often a lower monthly payment to the lender.

However, Chapter 13 bankruptcy isn’t for everyone. It requires you to use your income to repay some or all of your debt, and you’ll have to prove to the court that you can afford to meet your payment obligations.

If you are struggling with unmanageable debt and need help, we are pleased to offer a consultation with an experienced attorney. Our attorneys will answer your questions regarding your financial issues and concerns, and they will develop personalized solutions for your financial problems.

Your initial office visit with a bankruptcy attorney is free. If you are not sure what to do next or need more information, contact us to take advantage of our free consultation to analyze all your options.

The attorneys of Gentry Arnold PLLC are members of the National Association of Consumer Bankruptcy Attorneys.

We are a debt relief agency. We help people file for bankruptcy under the U.S. Bankruptcy Code.