Chapter 13 Bankruptcy Definition

Chapter 13 bankruptcy is most often called a reorganization of debt. With a Chapter 13 you will not have to hand over your property. A Chapter 13 will allow you to reduce what you owe or allow for more time so that you can pay off the debt in full. Depending on your income, the court will demand a monthly payment, made payable to the court trustee for a period of 3 to 5 years. If for some reason you cannot make a payment – for example, you lose your job – the bankruptcy trustee may modify your plan, or the court might let you discharge your debts on the basis of a hardship. If the discharge isn’t allowed, you may be able to convert the bankruptcy to a Chapter 7. If nothing is done, for example, you miss a payment, did not get the bankruptcy discharged, you will still owe your debts, plus any interest creditors did not charge while your Chapter 13 was pending.

• You may file Chapter 13 if you find yourself in the following situations:

• Your income supersedes the Median Income level.

• You want to pay off your debt on mortgage or a car loan.

• Your total asset exceeds the exemptions.

• Most of your assets are non-exempt, and may lose them if you file a Chapter 7.

With a Chapter 13, you will not have to give up property. Instead, you will repay your debts out of your income. So, if you have nonexempt property that you can’t bear to part with, then filing Chapter 13 will be your better choice.

Financial Choice Network recommends you speak with an attorney to discuss bankruptcy. We are committed to connecting you to the right provider! For a free consultation call now, or fill out a form and get back on the road to financial freedom.