Chapter 13 bankruptcy is designed for individuals with regular income who would like to pay all or part of their debts in installments over a period of time. A chapter 13 bankruptcy can also help debtors restructure payments on secured debts like cars and furniture. Chapter 13 can also stop foreclosure and help homeowners pay back mortgage payments through the bankruptcy court while allowing the homeowner to pay future mortgage payments directly to their mortgage company.
In a chapter 13 bankruptcy, a plan to repay creditors all or part of the money that is owed is filed with the court. The chapter 13 plan is based upon future earnings. The period allowed by the court to repay debts may be as short as three years or as long as five years, depending on income and other factors. The court must approve a chapter 13 plan before it can take effect.
After completing payments under a chapter 13 plan, debts are generally discharged except for domestic support obligations like alimony and spousal support; most student loans; certain taxes; most criminal fines and restitution obligations; certain debts which are not properly listed in the chapter 13 bankruptcy petition; certain debts for acts that caused death or personal injury; and certain long therm secured obligations like mortgage payments and other debts that extend beyond the time allowed for the completion of the chapter 13 plan.
Our bankruptcy lawyers offer a free bankruptcy consultation to discuss your bankruptcy options and to answer any questions about chapter 13 bankruptcy.