Also known as a debt consolidation plan Chapter 13 differs from Chapter 7 in that it does not immediately discharge all of your debts. However, it does have many advantages over a Chapter 7 plan. A Chapter 13 bankruptcy can do several important things:

  • Allows you to catch up on mortgage arrears
  • Strip an unsecured second mortgage
  • Allows you to pay tickets and get your license back if it’s been suspended
  • Decrease interest rates on vehicles to 5%

In a Chapter 13 Bankruptcy, a financial plan is created in which you reorganize your debts and pay either all or a portion of this debt. Your income is evaluated and what is determined as your excess disposable income is used to create a payment plan. The plan duration is between three and five years.

The primary advantage of Chapter 13 bankruptcy is that you may be able to keep all or most of your secured assets (house, car, etc.) and discharge some or all of your unsecured debt.

To clarify, the plan payment amount is based on your disposable income and your ability to pay. If you maintain your regularly scheduled payment, at the end of the plan your remaining debts are discharged, and you maintain your secured assets.

A Chapter 13 Bankruptcy is different and more complex than a Chapter 7 Bankruptcy and seen as non ideal for some clients seeking bankruptcy protection, since there is a continuing payment on your debts rather than a total dissolution, as in a Chapter 7 Bankruptcy.

Shuffield Brankruptcy Law Will Help You Determine Which Route Is Best For You

An experienced attorney can help you decide which is the best decision for you. Shuffield Bankruptcy Law has the expertise to guide you through the Chapter 13 process.

Shuffield Bankruptcy Law offers free consultations and work with you through every step of the process — from the preparation of a financial plan to the closure of your case. Trust that you will be in good hands.

To schedule your free consultation, call Shuffield Bankruptcy Law at 206-661-6001.