Bankruptcy Chapter 13

Bankruptcy Chapter 13 Definition  

    A Chapter 13 case is a wage earner’s plan. In a Chapter 13 you must have a regular, steady source of income, and that income must exceed your monthly, budgeted expenses. You then send all of your surplus monthly income to the bankruptcy trustee each month (this is called your plan payment), and he or she uses that money to pay your creditors who have filed claims.

How long does a Chapter 13 Plan Last?

      Chapter 13 bankruptcy plans usually run between 36 months and 60 months. If your income fluctuates during the life of the plan (either up or down) your plan payment can be modified to address that situation. If your plan payments have not paid 100% of your unsecured debt after 60 months, the remaining balance of your unsecured debt is forgiven or discharged.

What is the benefit of a Chapter 7 vs Chapter 13 bankruptcy filing?

A Chapter 7 bankruptcy filing will discharge all debts unless they are re-affirmed.  See our page on Chapter 7.  A debtor must qualify to file for Chapter 7 by passing the means test. An attorney can help you determine if you qualify for Chapter 7 or Chapter 13.