How Chapter 13 Bankruptcy Works
Chapter 13 allows you to make payment arrangements on your debt and reduce the total amount due to some creditors. Your debt is consolidated and reduced to allow an affordable monthly payment that is partially based on your ability to pay. Chapter 13 repayment plans are typically three to five years in length. At the end of a successful plan, you receive a discharge. Unlike Chapter 7 bankruptcy, Chapter 13 does not require you to liquidate any assets.
The key requirements to qualify for Chapter 13 bankruptcy protection are having the means to make monthly payments and being current on your tax filings. You propose a plan to your creditors at the beginning of your case. The plan tells the Chapter 13 trustee how to pay your creditors. The goal is for your plan to be approved by the court.
Once the plan is approved by the court, it becomes a Federal court order. You will make payments to a court-appointed trustee who will then distribute payments to your creditors. Your monthly payment will be made through a deduction from your paycheck if you are employed.
Benefits Of Filing For Chapter 13 Bankruptcy
Chapter 13 allows you to keep your assets. Other benefits of Chapter 13 bankruptcy include:
- Stops foreclosure on your home
- Allows you to catch up your mortgage a little bit at a time instead of in a lump-sum payment
- Stops repossession of your vehicle
- Reduces your interest rate on your vehicle
- Reorganizes and reduces your vehicle payment
- Protects co-signers on your debt from collection activity
- Usually reduces the total amount you owe
- Allows you to consolidate student loans. Student loans are typically not dischargeable
Contact Athena Legal, LLC To Reset Your Finances Through Chapter 13 Bankruptcy
To learn more about how Chapter 13 bankruptcy can relieve your financial stress, set up a free initial consultation by calling 614-222-0055 or filling out our online contact form. The friendly bankruptcy legal team at Athena Legal, LLC is here to help.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.