Monday, February 13, 2017

Four Things To Know About Chapter 13 Bankruptcy Cases

If you are considering filing for the protection of bankruptcy, you need to know the differences between the two main types of consumer cases. There is Chapter 7, which is like a liquidation of your debts and will eliminate all of your unsecured obligations. And, there is Chapter 13 which is a reorganization of your debts and will require to pay back at least a portion of your unsecured loans. Most people prefer to file a Chapter 7, because Chapter 7 cases do not take as long and for the ability to discharge unsecured debt in its entirety. But that does not mean a Chapter 13 case will not provide you with financial relief or lacks financial benefits.

Four tings to know about a Chapter 13 bankruptcy are:

         In Chapter 13 you come up with a plan of debt repayment, and then make payments to the Trustee who is administering your plan. The Trustee will then pay your creditors whatever portion of the total Chapter 13 Plan payment they are entitled to receive.
         A Chapter 13 can last up to five years, giving you an entire 60 months to repay your debts while under the protection of the bankruptcy courts.
         You are allowed to pay the value of car rather than the actual amount due, and can also pay for your car at a lower interest rate than what is called for in your auto financing contract.
         If you are able to pay off the total due under your Plan early, you may do so, and receive a discharge earlier.
The determination as to which chapter of bankruptcy you are eligible to file is made by performing the means test. The means test is a mathematical computation that must be done before you file a case, so you know what type of case to file. There are statutory guidelines in place that dictate how the means test calculation is done, and it is best to have an experienced bankruptcy attorney do this for you. Call us today to find out more about bankruptcy, and how a Chapter 13 can help you.

For more information about bankruptcy, contact us at We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.

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