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chapter 13 bankruptcy

What Is Chapter 13 Bankruptcy?

Chapter 13 is a personal reorganization or repayment plan in which you make monthly payments to a trustee who is appointed by the bankruptcy court. The trustee then pays your creditors at least a portion of what you owe.

What Happens When I File Chapter 13 Bankruptcy?

At the successful completion of a Chapter 13 agreement, whatever listed debt that has not been paid by the trustee (with a few exceptions, such as domestic support obligations, certain "Iong-term debt" and student loans, etc.) is discharged. 

 

To keep your home, you must continue to pay your mortgage, but the Chapter 13 can be used to catch up on your late mortgage payments without risk of foreclosure. 

Need a Chapter 13 Bankruptcy Attorney?

To file for Chapter 13, you pay only the court costs and a portion of the attorney fees. The balance of the attorney fee is paid by the trustee from your Chapter 13 plan payments.

Some of the most common reasons debtors choose to file a Chapter 13 are:

  • To stop a home foreclosure or vehicle repossession

  • To avoid a second and/or third mortgage

  • To cancel judgment action and other court related matters (i.e. garnishment)

  • To pay non-dischargeable debts, such as recent taxes or student loans


The purpose of Chapter 13 and Chapter 7 bankruptcies is to help debtors who are having financial problems. It's important that you consult with an experienced bankruptcy attorney to determine if you qualify for bankruptcy or if there are other options to consider, and if you decide to file, which type is best for you.

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