chapter 13 bankruptcy

In filing a chapter 13 bankruptcy, you propose a debt repayment schedule, and, for the next 3336-60 months, you pay what you can afford. The two types of payment you may have to make are: To a trustee who doles out the money to creditors or so-called payments outside the plan, which are payments that are coming due after you file and are paid directly to the creditor.

Creditors usually end up receiving only a small percentage of what they’re owed and typically must settle for pennies on the dollar.

After that you’re home-free.

You can’t eliminate debts in chapter 13 bankruptcy if you have received a discharge in a prior case filed under chapter 7 bankruptcy, 11 bankruptcy, or 12 bankruptcy within the past four years, or a discharge in a case file under chapter 13 bankruptcy within the past two years.

Even if you can’t eliminate debts you can still use chapter 13 bankruptcy to keep creditors off your back while you pay them in full over three to five years. Only individuals with regular income (no corporations, no partnerships) can file under Chapter 13 .bankruptcy

Your unsecured debts can be more than $307,675 and secured debts can’t exceed $922,975. Priority claims must be paid in full over the life of any chapter 13 bankruptcy plan.

If you can’t repay really big child-support obligations over a 60 month period, do not file chapter 13 bankruptcy .

For information on how to file, please go to chapter 7 bankruptcy page.

Chapter 13 bankruptcy is probably the way to go in any of these situations:

You want to catch up on mortgage payments
You need time to pay off past-due support obligations
You owe tax debts that you want to pay off without interest or penalties
You received a discharge in a bankruptcy case filed within the past eight years
You earn enough money to pay monthly expenses with ease and want to do your best to repay creditors at least some amount

The advantages of Chapter 13: bankruptcy

· You can pay taxes over time, possibly-without interest or penalties

· Your overdue alimony and child support can be stretched out and paid off over three to five years

· You can get your house and car payments up to date over the life of the plan

· You can reduce payments on some secured loans to the value of the collateral

· You can keep non exempt property

· You can get some bankruptcy relief even though you received a discharge in a prior Chapter 7 bankruptcy, 11 bankruptcy, or 12 bankruptcy case filed less than 8 years ago

· You can protect a cosigner from credit harassment by proposing to pay the cosigned debt over the life of the plan

Disadvantages of Chapter 13 bankruptcy:

You may feel like you are on a leash…you are
You’ll probably have to give up your income tax refuns
You may receive an unexpected windfall and then lose it to the trustees
You won’t be allowed to incur any more debts without the trustee’s consent
You can lose your job and your ability to maintain payments, resulting in dismissal of your case
You may risk your homestead exemption if you move or sell your house

About two-thirds of chapter 13 bankruptcy plans fail. Then the bankruptcy protections disappear, and the debt collectors are back.