In Chapter 13 bankruptcy, the trustee does not sell your property and assets to repay your creditors. Rather, you use a portion of your income to pay some or all of what you owe to your creditors over time.
The following are reasons to file Chapter 13 bankruptcy:
- In Chapter 13, you can get rid of a second mortgage lien on your real estate if the market value of the house is less than the amount owed on the first mortgage.
- Chapter 13 can provide a way to reduce your secured debts to the value of the collateral so you can pay only what the property is worth currently.
- Chapter 13 lets you make up for missed payments on a house, car, or other collateral over a three to five-year period so you can keep the property instead of losing it to foreclosure or repossession.
- Chapter 13 gets rid of certain types of debts that aren’t discharged in Chapter 7.
- Chapter 13 allows you to operate a business while you are in bankruptcy.
Under a Chapter 13 bankruptcy, you must make payments under a repayment plan to the bankruptcy trustee. The bankruptcy trustee is the person who oversees your case. The trustee uses that money to pay your creditors over time and his or her statutory fee. This fee is usually 10% of the amount distributed under your plan. Please call our office to meet with an experienced attorney to help you decide whether Chapter 13 bankruptcy is right for you.