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Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a reorganization of debt. There are several reasons a person might file a Chapter 13 bankruptcy, including:

  • Income is too high to be eligible for a Chapter 7 bankruptcy;

  • Need to bring mortgage payments current to avoid foreclosure;

  • A desire to "strip down" interest of secured debts such as vehicle loans;

  • Need to bring tax payments current without interest or penalties;

  • Need to bring rent payments current to avoid eviction;

  • Having received a bankruptcy discharge too recently.

 

A Chapter 13 has a monthly plan payment. No two plan payments are alike; the payment is carefully calculated based on income, expenses, and other factors. Your attorney will work with you to determine the plan payment as it is tailored to your circumstances. 

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A Chapter 13 bankruptcy lasts between three and five years, depending on your income and your ability to make your plan payment. 

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Biggest myth about Chapter 13: "I have to repay all my debt in a Chapter 13." Most Chapter 13 plan payments repay a percentage of your unsecured debt (credit cards, personal loans, medical debt). At the end of your plan, what isn't paid of that debt is eliminated (discharged) just like in a Chapter 7. Sometimes, you will be required to pay back all your unsecured debt, but that debt is paid without interest or late fees. Some debt called "priority" debt (recently filed taxes, domestic support obligations, or wages/benefits owed to former employees) must be paid in full but without interest or penalties. 

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Districts where we practice bankruptcy:

  • Western District of Washington

  • Eastern District of Washington

  • Western District of Texas

  • Northern District of Ohio

  • Eastern District of Michigan

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​Helpful Links:

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