Chapter 13 allows you to keep your property and to catch up on past due rent, car, tax and mortgage payments by making payments over a five-year period.
Chapter 13 - Individual Debt Adjustment
A Chapter 13 bankruptcy allows individuals who do not qualify for a Chapter 7, or who are behind on mortgage, car payments, taxes, and other debts, to get rid of most debt and to keep their homes or cars. You cannot file a Chapter 13 if you are a stockbroker. You must have a steady job to qualify. You cannot have more than $419,275 in unsecured debt, like credit cards, and no more than $1,257,850 secured debt, such as your mortgage.
We can stop a wage garnishment, foreclosure, eviction or repossession in many cases right up until the date it happens. We may even be able to reduce the amount of your mortgage or car loan, or do a mortgage loan modification through the bankruptcy court. Payments are made over a five-year period in a Chapter 13 to catch up on the amounts you are behind on your mortgage, rent, car payments and taxes, in addition to making the regular monthly payments. The process to calculate how much you pay is complicated and often involves expert negotiations with the Chapter 13 Trustee. It is virtually impossible to do a Chapter 13 without a highly experienced bankruptcy attorney. Contact us now so we can discuss whether a Chapter 13 is right for you. |
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Eligibility
Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual's unsecured debts are less than $419,275 and secured debts are less than $1,257,850. 11 U.S.C. § 109(e). These amounts are adjusted periodically to reflect changes in the consumer price index. A corporation or partnership may not be a chapter 13 debtor. Id.
An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.
An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.
Links: https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics
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