Chapter 13 Adjustment of the Debts of an Individual with Regular Income

Chapter 13 bankruptcy is titled Adjustment of Debts for an individual with regular income. In a Chapter 13, the debtor will make monthly payments for a period between 3 and 4 years to a court appointed trustee who distributes the proceeds to the creditors. The amount of the payment is based on the amount of your income and expenses, and the present value of the plan must exceed the amount unsecured creditors would receive in a Chapter 7 liquidation.

In the case of secured debts such as home mortgage or vehicle loans, the debtor has the option to pay these outside the plan. Chapter 13 can stop repossessions or foreclosures by giving up to five years to pay back any arrearage on these debts.

When a debtor files a Chapter 13 bankruptcy petition, all collection attempts by creditors including telephone calls, garnishments and repossessions are stayed. Approximately thirty days after the Chapter 13 is filed with the court, you will be required to make one appearance in front of the court appointed trustee and the judge. The court and the trustee need to make sure that you know and understand what payments will be required by you and to make sure you have enough income to make those payments. Once you have completed all the payments, the court will enter a discharge order which will relieve you of liability on all the debts in the plan.

The court cost to file a Chapter 13 case is $274. This must be paid with a check or cc by the time the case is filed. The attorney fees for a Chapter 13 case will depend on the nature and complexity of the case. The fees must be approved by the court. Typically, a portion of the fee is paid before the filing of the Chapter 13 bankruptcy, and the balance of the attorney fee is paid through the Chapter 13 plan. During your free consultation we will be able to quote you an exact fee.