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What to Expect

Under Chapter 13, you file a proposed plan with the court to repay you debts over three to five years. Like with a Chapter 7, a trustee will be appointed under Chapter 13. The trustee, generally, will collect payments made under an approved repayment plan, and pay part of your debts. Once all payments are made under your plan, your debts are discharged.[1] There are, though, some debts that cannot be discharged through Chapter 13. Some of the common examples of debts that cannot be discharged are: domestic support obligations; most student loans; certain taxes; debts for fraud of theft; and certain debts for acts that caused death or personal injury. This is not an exclusive list, and you should consult an attorney familiar with bankruptcy law before filing a petition.

[1] See Official Bankruptcy Form 2010.

CHAPTER 13 BANKRUPTCY- the “Wage Earner’s Plan”

Chapter 13 is for individuals who have regular income and would like (a) to pay all or part of their debts in installments over a period of time, and (b) to discharge some debts that are not paid.[1] Regardless of income, you may file under Chapter 13 if your secured and unsecured debts are not more than the amounts set forth under federal law. Though subject to periodic adjustments, any individual (even if you are self-employed) is eligible for Chapter 13 relief if the individual’s unsecured debts are less than $394,725 and secured debts are less than $1,184,200.[2] 

It is important to consult an attorney familiar with bankruptcy law before filing a petition. Contact us today for a free consultation regarding whether you qualify for bankruptcy protection, and which Chapter is right for you.