Contact us for a free initial consultation.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy gets its name from Chapter 13 of the Bankruptcy Code.

The purpose of Chapter 13 is somewhat different from Chapter 7.  Chapter 13 does provide for discharge of certain debts, but rather than liquidating the assets of the debtor, the focus is to provide the debtor with enough time to reorganize and pay certain debts without the threat of legal action from the creditors.  Chapter 13 is the usual choice for individuals or small businesses who wish to hold on to their assets, but who need time to catch up on late payments on those assets and who wish to avoid legal action or foreclosure.

Generally speaking, after the plan period is over, provided that the petitioner has made all required payments under the plan, the remaining debt (except debt on assets the petitioner wishes to keep) is discharged.  As with Chapter 7, some debts, however, will most likely not be discharged, except under very rare circumstances.  These include: taxes, child support, alimony, federally guaranteed student loans, and certain court-awarded damage claims.
Eligibility Requirements
To be eligible to file under Chapter 13, the petitioner must have a regular source of income and the petitioner’s debts cannot exceed certain limits.  The petitioner has to come up with a plan to pay off certain debts over a specified period of time, usually 3 or 5 years.  This plan has to be approved by the court.  The petitioner maintains possession of his/her assets and makes payments to the creditors (sometimes through the trustee) throughout the plan period.  The total amount of the petitioner’s payments under the plan will be determined by his/her income, however, the plan must provide for payment to the creditors of at least as much money as they would have received had the petitioner filed a Chapter 7 Bankruptcy.  The plan must also provide for the complete payment over the course of the plan (3 to 5 years) of all past due amounts owing on assets that the petitioner wishes to keep.
Requst for more information
Schedule an Appointment
Type of Information:
* Privacy Policy
Practice Areas
Commercial Real Estate
  Purchase and Sale
  Real Estate Due Diligence
Residential Real Estate
  Property Use Issues
Real Estate Finance
  Commercial Finance
  Residential Foreclosure Prevention
  Residential Loan Modification
  Chapter 7 - Fresh Start
  Chapter 13 - Reorganization
  Bankruptcy Basics
  Glossary of Bankruptcy Terms
  © 2013 The Law Offices of John P. Skowronski.  All rights reserved. Disclaimer