Chapter 13 Bankruptcy Overview

Chapter 13 is typically filed when:

• your income is too high to qualify for Chapter 7;
• you want to save your home from foreclosure (or your car from repossession); or
• Not enough time has passed since a previous bankruptcy filing.

In Chapter 13 you make monthly payments for the life of your Chapter 13 plan (3 to 5 years).  At the end of your plan your mortgage will be current, your car loan paid off, and most other debt wiped out.

If you pass the means test your plan may as short as 3 years or as long as 5 years or any length of time in between.  Your payment will be based on what your monthly budget shows you can afford to pay and/or the amount necessary to “catch-up” your mortgage payments.  If you do not pass the means test your plan must last 5 years and your monthly payment will be determined by the means test formula.

Other aspects of Chapter 13 are similar to Chapter 7, including the documents we’ll need from you, the preparation and filing of a bankruptcy petition, the 2 classes you must take and the meeting of creditors.