Chapter 13 bankruptcy provides protection against further collection action and allows for debts to be restructured into a payment plan. The filing reorganizes debt to help a debtor pay it off within a set time period. At the end of the period, if there is an unpaid balance it may be discharged if the debt is eligible. Like Chapter 7 bankruptcy , it has the ability to give consumers a fresh start by gaining control of their finances.
Chapter 13 allows debtors to create a repayment plan for debts that are non-dischargeable including child support, taxes and even settlement arrangements for marital property. The option is also ideal if you are behind on car or house payments. The repayment plan under Chapter 13 doesn’t have to pay outstanding debt completely. An agreement can be created depending on what creditors are willing to except.
Chapter 13 gives debtors time to settle debt that may not qualify for discharge under Chapter 7. This includes settling back taxes, back child support, removal of liens if they are more than the value of the assets and mortgage defaults.
Eligibility to file Chapter 13 bankruptcy includes having regular income that exceeds living expenses. Secured debt shouldn’t exceed over $1,010,650 and unsecured debt shouldn’t exceed over $336,900.
If you have filed bankruptcy in the past, it is possible you may be able to file again after a certain time period. Talk to a qualified bankruptcy attorney to go over your options.