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Chapter 13

Hit the Pause Button.  Breathe.

Chapter 13 Bankruptcy is often referred to as a 'wage earner' or 'reorganization'  bankruptcy.  This terms reflects the fact this type of bankruptcy contemplates the repayment of some or all of your debts, over a three to five year period.  This type of bankruptcy is appropriate for those individuals who have property that they would otherwise have to surrender in a Chapter 7 bankruptcy.  With Chapter 13, you can keep your property. 

How does that work?

When filing a Chapter 13 Bankruptcy case, your assets and debts will be tallied and assembled into a Chapter 13 Plan, which is a blueprint for the repayment of your debt throughout the course of the bankruptcy.  The Plan will detail what debts are included in your bankruptcy case, what your monthly payment will look like, and what will happen to your debts when your Plan is completed.  During the pendency of your bankruptcy case (the life of the Plan), the Automatic Stay will be in effect, protecting you from creditor harassment and attempts at collection.

Stop Foreclosure!

In almost all circumstances, Chapter 13 is the only viable bankruptcy choice to avoid foreclosure of your home.  Not only will the Automatic Stay halt any pending foreclosure action (including an imminent auction), but Chapter 13 allows you to include your arrearages in your repayment plan, which will allow you to emerge from bankruptcy completely caught up on your mortgage payments.  In some circumstances, a forbearance agreement might be reached with your mortgage bank, allowing you to resume your monthly payment.

Don't forget the other stuff

Whether you fail to qualify for Chapter 7 relief, or have property you wish to keep, Chapter 13 is an effective way to deal with your debts.  Like Chapter 7, you can eliminate your dischargeable unsecured debt, and pay off non-dischargeable debts over the three to five year period of the Plan.  Once your Plan is approved by the Court, you will make one payment to the Chapter 13 Trustee, who will then distribute payments to your creditors accordingly.  Let them worry about who gets what!  Come in for a complimentary consultation, and we'll talk about what your Plan could look like!