In most cases, individuals who file for Chapter 13 bankruptcy have suffered from a temporary loss that has put them too far behind in debt to catch up on their own. Chapter 13 bankruptcy does not completely erase debt, but consolidates debt and restructures it into a monthly payment plan that is affordable.

Usually people awarded Chapter 13 make sufficient income to cover any living expenses, but not enough to pay off debts in full. When chapter 13 is awarded, the debtor pays for living expenses first, and then any left over money is used to repay creditors, even if just pennies on the dollar. Chapter 13 bankruptcy cases typically last for three to five years from initial filing to discharge, depending on the individual’s ability to pay.

Some individuals or families may benefit from this type of bankruptcy because they make too much money or have too much property to file for Chapter 7 relief.  When an individual does not qualify for Chapter 7 bankruptcy, he or she is likely eligible to file for Chapter 13.

Your attorney can explain how Chapter 13 may benefit you, and why it may be to your advantage to obtain debt relief under a Chapter 13 bankruptcy.  We would be happy to answer your questions, please call or email us so we may advise you given your specific circumstances.  Initial attorney consultations by phone and in person are free.