Chapter 13 bankruptcy filing is a way for individuals to undergo a financial reorganization supervised by a federal Bankruptcy Court. The Bankruptcy Code anticipates the goal of a Chapter 13 case as enabling income-receiving debtors debt rehabilitation provided they fulfill a court-approved plan. Compare the goal of Chapter 13 with the relief contemplated in Chapter 7 that offers immediate, complete relief of many oppressive debt(s).

The most important point to remember is that Chapter 13 “should” work. The filing of a case under Chapter 13 usually stays all creditors’ collection efforts and foreclosure against a debtor’s home. Thus the debtor should be able to keep his or her home, car(s), etc., as well as cut down other expenses, even those associated with a Chapter 13 filing itself.

Chapter 13 plan may include an extension of time to pay creditors, a reduction in the interest rate on one’s debts, and/or a reduction in principal owed. In most cases however, most debtors will have to make all or at least some lump sum payments into their plans. The amount this payment must be is determined by the Debtor’s ability to pay.

A debtor may be eligible for Chapter 13 relief only if his/her unsecured debts (credit cards etc.) are less than $394,725 and secured debts (such as mortgages) are less than $1,184,200.

If you cannot qualify for Chapter 13, you may qualify for a Chapter 7 Bankruptcy.

The primary reason for filing a petition under Chapter 13 is to discharge bad debts rather than liquidating them by way of distributing property to creditors. A debtor should think of the process for this reorganization as an opportunity (with some hard work) to bring his or her income and expenses into alignment with one another.

One of the primary goals of a Chapter 13 case is to reorganize one’s debts, which may include extending an existing loan, reducing the interest rate on a loan or changing from a variable-rate mortgage to a fixed-rate mortgage. In some cases, this will enable debtors to reduce the principal of the loan. This is all within parameters set out in Chapter 13 which is designed to enable individuals, who are earning regular income but can no longer meet their financial obligations because of some unforeseen crisis (such as illness or unemployment), to reorganize their debts so that they can afford to pay them back over time.

Since most debtors do not plan to file bankruptcy and most debtors do not want anything to do with the subject of personal finance, Chapter 13 is a very different type of filing. The debtor must prove “undue hardship” in order to keep assets such as a home or car(s) that might otherwise be sold off under Chapter 7.

If you do not qualify for Chapter 13 you will either need to repay some or all of your debts under Chapter 7, surrender the assets/property that you wish to keep under Chapter 7 (in return for a waiver of discharge) or if you do not want to give up any property, you may be eligible for the same relief under Chapter 11.

After you file, the creditors cannot contact you to collect a debt. Any pending lawsuits go on hold until your case is resolved. This can give you time to develop a plan that works for you and makes your life more manageable.

A Chapter 13 bankruptcy allows an individual with regular income to develop a plan to repay all or part of his or her debts.

There are two types of Chapter 13 bankruptcy cases: “individual” and “small business.” If you belong to an unincorporated business that owes money, you must file for Chapter 13 protection under the individual category. (Corporations cannot file for Chapter 13.) For information on filing a small business case, see Chapter 11 Bankruptcy.

Chapter 13 is a flexible repayment plan that gives you up to five years to pay back your creditors what you can afford. It also allows you to keep all of your property, including your car and house, while repaying your debts over time. In most cases, this means that the Chapter 13 trustee will not sell your property.

Depending on the value of your assets, you may have to pay a portion of the value into your plan as unsecured creditors (credit cards and other unsecured debts) are paid less than 100% under Chapter 13 bankruptcy.

You must file all required documents with the court and keep to the following deadlines:

A Chapter 13 repayment plan must be filed with the court within 45 days of filing your petition. A court-approved payment plan requires all creditors to agree to it before it can take effect. You are required to attend a meeting of creditors where you will have an opportunity to explain your plan and answer any questions that the trustee or creditor may have.

A Chapter 13 repayment plan must be filed with the court within 45 days of filing your petition. A court-approved payment plan requires all creditors to agree to it before it can take effect. You are required to attend a meeting of creditors where you will have an opportunity to explain your plan and answer any questions that the trustee or creditor may have.

If your Chapter 13 plan pays less to unsecured creditors than they would receive under a Chapter 7 bankruptcy, you must either repay the difference or surrender any nonexempt property you wish to keep. Any additional money not paid to the creditor will be returned to you by the trustee. This type of repayment is known as “cram down.”

A Chapter 13 bankruptcy allows you to take care of your debts over a period of time while you continue with your life, unlike Chapter 7 bankruptcy where many people have their debts wiped out without ever knowing if they have enough income to repay them.

This can be especially helpful for someone who is trying to keep a house or car. If you are behind on your mortgage or car payments or facing foreclosure or repossession, Chapter 13 can stop this process while allowing you to obtain the relief you need based on your current financial situation.

Chapter 13 bankruptcy does not wipe out student loans. However, if you are filing for divorce after October 17, 2005 and have an education loan, you can seek to repay this debt through your bankruptcy repayment plan.

Chapter 13 bankruptcy allows individuals who are facing foreclosure on their home or repossession of their car to reschedule these debts into their payment plan and take up to 60 months to pay them back as opposed to the standard Chapter 7 where you have just a few months before you lose your home or vehicle.

Chapter 13 bankruptcy allows you to pay back the debt over time, making affordable monthly payments that fit into your budget. The end result is that you can save thousands of dollars and keep your assets such as a house or car.

Chapter 13 bankruptcy gives individuals with regular income an opportunity to develop a plan to repay all or part of their debts.

The repayment plan developed in Chapter 13 is based on the person’s ability to repay the debt through a three-to-five-year plan.

In most cases, once you have paid back a portion of your debts over three to five years, you will no longer be required to make payments and all of your remaining unsecured debts that were included in the repayment plan will be discharged or forgiven.

In a Chapter 13 bankruptcy repayment plan, you have three to five years to pay off your debts from the date of filing with the court back payments and interest. In some cases, depending on your income and ability to pay, it may be possible for you to obtain a discharge sooner than the end of the payment period.

Chapter 13 is a reorganization bankruptcy, designed to help individuals with regular income who wish to pay back their existing debts over time. Chapter 13 allows you to set up a repayment plan that will enable you to make all or part of your debt payments through the trustee and give you up to five years (60 months) to repay your debt.

Get started now. This website can help you learn all about Chapter 13 bankruptcy and how it works, as well as provide information on hiring an attorney or finding free legal aid. You can complete the required financial tests online (see below), receive your case number fast, and use our document preparation services to prepare all of your documents for filing with the court.