Chapter 13 Bankruptcy:
A Quick Overview
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, often referred to as a "wage earner's plan," allows individuals with a regular income to reorganize and repay their debts over time. Unlike Chapter 7, Chapter 13 does not require liquidating assets. Instead, it enables you to keep your property while making affordable payments to creditors.
How Does Chapter 13 Bankruptcy Work?
Filing the Petition: The process begins with filing a bankruptcy petition, which includes your financial information and a proposed repayment plan that spans 3 to 5 years.
Automatic Stay: Immediately after filing, an automatic stay goes into effect, stopping all collection actions, including foreclosure, repossession, and creditor harassment.
Repayment Plan: You will propose a repayment plan, which must be approved by the court. The plan prioritizes secured debts (like your mortgage or car loan) while addressing unsecured debts (such as credit card bills) based on your disposable income.
Meeting of Creditors: About a month after filing, you’ll attend a Meeting of Creditors (341 Meeting) where the trustee and creditors can ask questions about your plan.
Plan Approval and Payments: Once the plan is approved, you begin making monthly payments to the trustee, who distributes the funds to your creditors according to the plan. Successful completion of the plan results in the discharge of remaining eligible debts.
Is Chapter 13 Right for You?
Chapter 13 bankruptcy is ideal for individuals who want to avoid foreclosure, catch up on missed payments, and repay debts in a manageable way. Consulting with an experienced bankruptcy attorney can help you determine if Chapter 13 is the right option for your financial needs.
Contact Bankruptcy Attorney Ross Johnson Today for a Free Consultation
If you’re considering Chapter 13 bankruptcy, attorney Ross Johnson can help. For a free consultation, call (415) 234-0361 or reach out online.