Chapter 13 Bankruptcy

Chapter 13 is commonly known as the “wage earner ” bankruptcy. Chapter 13 bankruptcy basically reorganizes your debts, lowers some of the amounts due and buys you more time. Chapter 13 bankruptcy gives you anywhere from three to five years to repay your accumulated debts on more favorable terms for you.

It is appropriate if you have a consistent income, either from employment or other income… enough to pay your monthly living expenses plus a court appointed trustee. It is most frequently used when Chapter 7 is not achievable or does not accomplish your goals.

The results of Chapter 13 are complicated. Some debts will have to be paid in full, while some can be greatly reduced and paid over the three to five year period. Your indebtedness will be placed under court supervision and court protection.

Your creditors are blocked from harassing you, repossessing your properties, garnishing your wages,or continuing any lawsuits against you .

Chapter 13, by virtue of “an automatic stay” will prevent an immediate foreclosure of your home, and give you a reasonable amount of time to

catch up on your payments. This is an advantage over a chapter 7 filing.

You must make regular payments to your court appointed trustee. If you do not, your employer may withhold a portion of your wages in order to pay the trustee. Failure to pay the appointed payments will result in your case being converted to liquidation under chapter 7.

The complexity of a Chapter 13 filing makes it imperative that you consult with a qualified bankruptcy attorney so mistakes are avoided and you get the best deal possible for your situation..

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