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Chapter 13 Bankruptcy: Is reorganization right for me?

Chapter 13 Bankruptcy allows a person to consolidate their debt while making affordable payments to a Chapter 13 Bankruptcy Trustee. A payment plan is proposed, which repays in whole or in part the total indebtedness over a three or five year period, depending on an individual’s income and expenses. The amount of the payment depends on the following factors: monthly income, monthly expenses, the amount and nature of the debt, and the nature and extent of one’s assets.

The most common reasons a person files Chapter 13 Bankruptcy is to repay arrears on an individual’s home, restructuring auto loans to save the family vehicle, and retaining “non-exempt” assets.

The Bankruptcy Reform Act of 2005, requires individuals seeking bankruptcy relief, whose income is greater than their state’s median income, to file under Chapter 13 of the Bankruptcy Code. In other words, if your income is “above average” you may have to repay all or part of your debt. Depending on a number of legal rules and technicalities, your repayment plan may be 0 percent, 100 percent, or somewhere in between.


Types of Debt

There are some unsecured and secured debt limitations that may prevent a person’s eligibility to file for Chapter 13 bankruptcy. If a person exceeds those limits or has had a previous discharge under Chapter 7 or Chapter 13, they may not be eligible to file for Chapter 13 Bankruptcy. It is best to contact an experienced attorney to assist you with determining your eligibility.

When you file for Chapter 13, you will be required to list all of your debt. There are several ways an individual can propose to repay their debt through a Chapter 13 Bankruptcy plan. Your Chapter 13 Bankruptcy lawyer at The Reissman Law Group, P.A. will develop a plan based on your situation and assist you in moving forward while reorganizing your debt.


Finding Help

The first step to filing Chapter 13 Bankruptcy is to contact us to determine if this is the best solution for you. Together, you and the attorney will develop a Chapter 13 plan and fill out all the necessary forms. The Chapter 13 Plan provides details of all the payments and transactions that will occur along with the duration of payments. The Chapter 13 Plan must be approved by the court and payments begin within thirty days after the case has been filed with the court. Payments are made to a Chapter 13 Bankruptcy Trustee, who will pay the creditors receiving distribution under the Chapter 13 Plan. Once all payments have been made, you will receive a discharge and the Chapter 13 Plan will be terminated.

Contact us today to speak to a qualified professional at the Reissman Law Group P.A., and start the road to financial freedom right now.

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