Chapter 13 Bankruptcy Law Attorneys

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is a 3–5 years repayment plan where usually only a portion of unsecured debts are repaid, and when the plan is successfully completed, the remaining debt is discharged.

There are four main reasons someone might choose to file under Chapter 13 of the Bankruptcy Code instead of Chapter 7:

1. Under Chapter 7 of the Bankruptcy Code, persons who earn more than a median income level for their country of domicile may not be entitled to discharge.
2. Under Chapter 7 of the bankruptcy code, individuals may own more assets than they are allowed to retain, rather than surrendering that property they may instead choose to pay back to their unsecured creditors, over 3–5 years under Chapter 13 Bankruptcy, what the creditors would have received had their property been liquidated and redistributed.
3. Chapter 13 of the Bankruptcy Code provides the legal right to cure a mortgage arrearage over a 3–5 years repayment plan in order to escape foreclosure.
4. Certain special categories of debt which would not be covered by Chapter 7 shall be discharged under Chapter 13.