Chapter 13 Bankruptcy

                A Chapter 13 Bankruptcy is often called a “wage earner” because you must have a regular source of income. In a Chapter 13 case a customized plan is created to meet your individual circumstances. You will make payments to the Bankruptcy Trustee who make payments to your creditors.  A Chapter 13 case may be an option for you if you have fallen behind on your mortgage note or car payments.

Chapter 13 bankruptcy rules are a little different than other types of bankruptcy. When you file a case under Chapter 13 of the Bankruptcy Code, their aim is to have the opportunity to repay some or all of your debts, in better terms, i.e. lower or no interest. Unlike Chapter 7 which involves liquidation of assets, this process involves restructuring debts which allows the debtor to use whatever income they may have in the future to pay off the creditors.

The United States Bankruptcy Code gives the debtor a ceiling of 5 years, within which the creditors must be paid back. While the attorney will safeguard your interests, the entire process is carried out under the supervision of the courts. Payments will be made to the Chapter 13 Bankruptcy Trustee who will then distribute the money according to the plan filed with the Court and approved by the Bankruptcy Judge.