Practice Areas - Bankruptcy

Chapter 13 allows an individual who files bankruptcy to submit a plan to pay creditors based on a formula that considers the individual’s disposable income versus the amount of debt that the individual owes to his or her creditors.  Plans submitted under Chapter 13 must pay unsecured creditors at least as much as they would have received had the bankruptcy been a Chapter 7.  Unless you’re on the border-line of qualifying for a Chapter 7, this standard is usually fairly easy to meet.  After the Bankruptcy Code was amended in 2005, most individuals will probably be required to file their bankruptcy petition under this chapter.

Plans proposed under Chapter 13 must be confirmed by agreement of the U.S. Trustee, creditors, and the U.S. Bankruptcy Court, or if an agreement cannot be obtained then by order of the U.S. Bankruptcy Court.  Usually, plans proposed under Chapter 13 do not meet too much resistance if prepared correctly and accurately.  The benefits of a Chapter 13 plan includes the fact that interest rates and sometimes principal balances will be reduced, and, if you have tax debts or other non-dischargeable debts, those debts can be paid through the Chapter 13 plan too, which frees you from wage garnishments and/or foreclosures.  Chapter 13 plans last anywhere from three (3) to five (5) years, and require individuals to submit monthly payments to the U.S. Trustee’s office for distribution to creditors.  Chapter 13 plans cannot last longer than five (5) years, and at the expiration of the term of the plan (whether a three (3) year plan or a five (5) year plan) an individual receives a discharge.

Chapter 13 plans can be amended to take into consideration changes in employment, income, expenses, and so on.  U.S. Trustees and the U.S. Bankruptcy Court understand that life continues to occur even though you are in the midst of making your payments under a Chapter 13 plan, and so if you are faced with a change that makes it impossible for you to make the payments you have agreed to make under the Chapter 13 plan the Chapter 13 plan can be amended to take your current situation into account and make the Chapter 13 plan feasible again.  If you choose to use our firm, the attorneys will be available to assist you when these and other issues come up.

What Property Do I get to Keep?

 

 

 

Terminology Help

Chapter 7 - Liquidation form of Bankruptcy.

Chapter 13 - Payment Plan form of Bankruptcy.

Chapter 11 - Business and Corporate Reorganization

Businesses - What Happens to My Business in Bankruptcy?

Individuals - What Can I Keep In Bankruptcy?

Other Important Bankruptcy Terms You Should Know.