Chapter 13 is a voluntary option in bankruptcy that allows debtors to restructure their debts in a manner that allows them to repay some or all of their debts over the course of 3-5 years while being protected from their creditors by the bankruptcy court. Clients who have been harassed by debt collectors are especially grateful for this.
Here are some reasons why someone would consider filing a Chapter 13 bankruptcy:
Debtors with monthly income exceeding the allowable limits for Chapter 7.
Debtors who received a discharge of their debts in a previous Chapter 7 within eight years, or in a previous Chapter 13 case within six years.
Debtors have delinquent payments on secured debts, such as home or auto loans.
Debtors have domestic support (child support, alimony/maintenance) payment arrears.
Debtors have assets that exceed the allowable exemptions and would risk liquidation (selling) of their property by the bankruptcy trustee in Chapter 7.
Debtors are paying high interest on secured debts and may reduce the interest rates in Chapter 13.
Debtors may pay administrative costs of their bankruptcy case through their Chapter 13 plan payments.
Debtors may wish to restructure tax debts and other priority claims (Domestic Support, restitution payments, fines, etc.)
If you find yourself in difficult financial circumstances, please feel free to contact us for a confidential consultation.
There are few decisions that can have such a life-altering impact as the decision whether to file bankruptcy. Practically no one manages his or her finances so as to deliberately arrive at the point where bankruptcy is a necessary or desirable option. It is not a decision to be taken lightly because it has a lasting impact, both positively and negatively. We are sensitive to how difficult the decision can be and have the experience to know when to advise against filing. Either way, it is important to seek competent legal advice from an experienced attorney before deciding whether to file for bankruptcy.