Chapter 13 bankruptcy is used when you want to work out a plan to pay back what you owe. Similar to a refinance of your home, but this time includes all types of debt. What you owe can be paid back over a period of 5 years. As with Chapter 7, you have the option of returning property you can no longer afford to keep or continue paying for the property through what is called a Chapter 13 Plan. In order to pay for secured property through the Plan you need to be able to pay for it within 5 years. Property you cannot pay for within 5 years, such as first and second mortgages, are not included in the Plan. However, mortgage arrearages are most often the reason for filing Chapter 13 bankruptcy.
Another difference in Chapter 13 cases versus Chapter 7 is Qualifying for a Chapter 13 bankruptcy. Your income must be sufficient to make the Plan payment over the 5 years. There is more to the qualifying process which we will go over this with you to make sure whether this plan works for you.
Please contact our Chapter 13 bankruptcy attorney if you need help filing for Chapter 13 bankruptcy or if you would like to better understand if Chapter 13 bankruptcy is your best option.