BANKRUPTCY - CHAPTER 13 BANKRUPTCY

Chapter 13 Bankruptcy - (Reorganization or "Wage Earner Plan")

To begin a Chapter 13 bankruptcy you file a "plan" with the Court showing how you propose to pay off some of your past-due and current debts over a three to five year period. The Chapter 13 will allow you to keep your car, home and other valuable property if you can make the payments you commit to in your approved plan. In the majority of cases, these payments will equal or be greater than your normal monthly payments on your secured loans with some extra payment included to catch up on the past due amount. You may however discharge other unsecured debts so that your overall monthly out-go is now affordable. You may also obtain substantial assistance through a Wage Earner Plan via a Chapter 13 bankruptcy.

You should consider filing a Chapter 13 plan if you:

1) own your home and are in or near foreclosure;

2) are behind on loan debt payments but your income would enable you to catch up if you had more time to pay it off;

3) have valuable property you wish to keep and can pay with your income if you had more time.

In Chapter 13 you must have enough to pay for your necessities and to keep up with the plan payments as they come due. Generally, you can take the total amount you are behind in house or car payments, etc., and pay that amount over a sixty (60) month period.