Bankruptcy Chapter 13

Chapter 13 bankruptcy stops creditors from foreclosing on property or repossessing vehicles. Bankruptcy stops wage garnishments and gives you a chance to repay debts while under the protection of the Bankruptcy Court.

Chapter 13 plans often offer a repayment plan that is less than a debt consolidation plan offered by credit counseling agencies. Bankruptcy also protects you from being sued on the debts being repaid under the approved plan. The Chapter 13 plan is based on income, expenses, amounts to repay secured debt and protecting equity in your assets and repayment to unsecured creditors. Everyone’s Chapter 13 plan is different due to their individual circumstances.

The Chapter 13 bankruptcy allows you to set a repayment plan paying your secured creditors, such as house, car or furniture and catching up those payments that are behind while protecting necessary property.

The Unsecured creditors, credit cards, medical bills, check advances/payday loans are paid back at a percentage of the debt from 0% to 100% with interest depending on your income, expenses and equity in real and personal property.

The exemption for personal property (items that can be protected for you – for example, cash in the bank, paid for cars, jewelry and furniture) is 4000 per person until July 1, 2010 when that increases to $10,000 per person and $20000 per married couple.

Chapter 13 will stop foreclosures and allow past due mortgage payments to be caught up over the life of the Chapter 13 plan.

Chapter 13 will stop the IRS from garnishing your wages or selling your property. It allows you to make repayment of the tax debt while stopping the penalties and interest from running. (The Chapter 13 is NOT a dispute of the amount owed.)

Chapter 13 is often available if you have filed and received a Discharge in a prior Chapter 7 within 8 years. You may be eligible to file a bankruptcy even if you have filed before!

Chapter 13 protects necessary property such as your house or your car.

– A repayment plan that allows those with any regular source of income to pay back debt over a period of 3 to 5 years.

This results in a drastically lower payment on secured debts, thus relieving the “cash crunch” for most people.

Federal income taxes may be paid back with no interest.

Helpful Links:
Chapter 13 Trustee — http://www.ch13nsh.com/
U.S. Bankruptcy Court Website — http://www2.tnmb.uscourts.gov/
Online U.S. Bankruptcy Code — http://www.law.cornell.edu/uscode/html/uscode11/usc_sup_01_11.html