Chapter 13 Bankruptcy


 

Unlike Chapter 7, Chapter 13 is not available to businesses. A Chapter 13 also requires a regular source of income to fund a repayment plan. The source can be wages, retirement funds, annuities, or even a third party, such as a family member, making the payments.

About Chapter 13

Chapter 13 Bankruptcies are limited to the extent that only those individuals and married couples with less than $383,175 in unsecured debt, or $1,149,525 in secured debt.

The amount of money that you will pay back depends upon your disposable income. Disposable income is determined by taking your net income, minus allowable expenses, such as: Mortgage or rent payments, gas and electric, Phone including cell phone, Car operating expenses, Food, Insurance, Car Payments, etc. Not included in the allowable deductions are current debt payments such as credit cards, student loans, and payments on luxury items such as Motorcycles and RVs.

Some of the benefits of Chapter 13 Bankruptcies include the ability to catch up on Mortgage deficiencies to save your home, and to strip or treat totally unsecured Second Mortgages as unsecured debt. For instance, if your home is worth $100,000 and your first mortgage is $110,000, you can treat your second mortgage like unsecured debt, and it will be completely discharged once you finish your Chapter 13 plan.

In addition, non-support debt resulting from a divorce can be discharged in a Chapter 13 Bankruptcy. Furthermore, since priority debt such as Tax liability, penalties and support obligations must be paid in full, Chapter 13 provides a way to pay those debts while getting your other debts discharged at the end of 3 or 5 years, depending on the length of your plan.

Fees

I charge $3,000 for Chapter 13 filings. The fee covers all services through confirmation of the plan. However, unlike Chapter 7 fees which have to be paid prior to filing, you can pay some or all of your Chapter 13 fees through the plan. As with Chapter 7’s, a $200 retainer will begin the process, and you will be required to pay the $310 filing fee to the Court.