Chapter 13 Bankruptcy
CHAPTER 13: Chapter 13 is a reorganization of debt. Rather than paying 2 car payments and a pile of credit cards every month, Chapter 13 allows you to make a single payment to the court's trustee, who pays your debts for you. You must pay the value of the car(s) and catch up on any money you are behind on mortgages. Credit cards and medical bills get anywhere from 0 - 100% depending on your income and assets.
The good thing about Chapter 13 is that it gives you control over finances, making one manageable payment every month for all of your debts. You are also able to pay what a car is worth, not what you owe, so long as you have had it for at least 2.5 years. You can use chapter 13 to stop foreclosure and/or catch up on mortgage payments. Finally, there are no limits on income or assets in a Chapter 13 case.
There are downsides to Chapter 13 as well.
Unlike Chapter 7, which only takes 3-4 months, a Chapter 13 case lasts for 3-5 years.
During that time, you will not be able to get new credit. You have to make payments every month as well. Once or twice in the life of the case, if you get behind for a good reason, I can modify the plan to excuse a month or two of missed payments, but if that becomes a habit, the court will dismiss the case.
Whether you Choose Chapter 7 or Chapter 13, our office will make the process as easy and painless as possible. When you come in to see us, you will meet with an attorney, not a paralegal or legal assistant, but an attorney -- the same attorney who will prepare your case and go with you to court. Our goal is to make this process as stress-free as possible.