Chapter 13 of the Bankruptcy Code is a reorganization of debts. Chapter 13 reduces your overall liability and spreads out payments to creditors over time.

Who qualifies to file Chapter 13?

Only individuals with a regular source of income are eligible to be Chapter 13 debtors. Anyone is eligible for chapter 13 relief as long as your debts are less than $1,081,500 for secured debt and $360,525 in unsecured debt (these numbers change periodically). There are not any limits in Chapter 7.

Advantages of a Chapter 13:

• Chapter 13 gives you a chance save your home from foreclosure. We can stop foreclosure proceedings and you may cure delinquent mortgage payments over time.
• In a Chapter 13 bankruptcy the bankruptcy judge may rewrite the mortgage on your residence and extend them over the life of the Chapter 13 plan. Doing this may lower the payments.
• We can get rid of a second mortgage on your home.
• Protect third parties co-signers who are liable with you on consumer debts.
• In Chapter 13 you make the payments to a chapter 13 trustee and then the payments are distributed payments to the creditors. You do not have to deal directly with creditors anymore.
• If you have equity in real property or personal property, then there is an option under Chapter 13 to offer payment to creditors equal to payments that the creditor would receive from a Chapter 7 trustee.

How long does a Chapter 13 payment plan last?

Depending on the payment period is three to five years. The length of the Chapter 13 plan is determined by a calculation of your current monthly income.

If you'd like to discuss whether Chapter 13 or Chapter 7 is right for you, please contact us at 419-740-5936 or use the contact form on this page.