Chapter 13 Bankruptcy Information for Consumers
Chapter 13 is a reorganization plan to assist individuals and families as well as small business owners in restructuring their debt in order to pay their creditors back in full or in part. If debt collection pressure or the prospect of a home mortgage foreclosure has you thinking about bankruptcy as a possible solution, contact one of our experienced attorneys at O'Bryan Law Offices in Louisville, Frankfort or New Albany. We have helped thousands of people restructure their debt through the filing of a Chapter 13 bankruptcy.
We can help you find the right solution to your debt problems
Since the Bankruptcy Code amendments came into effect in 2005, many people who might otherwise have filed for Chapter 7 protection have instead filed for relief under Chapter 13. To qualify for Chapter 7 relief today, your gross household income must be no greater than the median in your home state. Anyone over the median will need to file for relief under Chapter 13.
What's the difference between Chapter 7 and Chapter 13 bankruptcy?
There are many differences, but the most obvious one has to do with debt repayment. In a basic Chapter 7 case, the debtor files a petition and schedules of assets and debts, attends a meeting with the trustee, turns over nonexempt assets if any, waits to see if anyone objects to discharge, and walks away from most unsecured debt immediately.
Chapter 13 debtors have to repay a portion of their unsecured debts in monthly installments over a period of three to five years. This isn't as bad as it sounds. Most Chapter 13 plans in Kentucky and Indiana pay about 10 cents on the dollar to unsecured creditors.
The most significant benefit of Chapter 13 consumer bankruptcy is the debtor's ability to hold on to nonexempt assets that would be subject to liquidation in a Chapter 7 case. At the completion of the repayment plan, the debtor gets a discharge on the unpaid portion of the claims.
Chapter 13 debtors can cure mortgage defaults while they pay off the plan
Our experience and focus on bankruptcy law allows us to design Chapter 13 plans with your specific needs and circumstances in mind. We can use the plan to cure defaults on mortgages, car payments, and other secured claims. The plan can also extend the payment periods for nondischargeable debts like recent taxes or student loans. We analyze your cash flow and the value of your nonexempt assets to find practical ways to protect your home and possessions, all while meeting the minimal needs of your creditors on consumer debt.
Every case is different, and we work closely with all of our clients to make sure that you are getting the most out of your bankruptcy case. To learn more about our approach to client service in Chapter 13 bankruptcy, contact one of our lawyers at O'Bryan Law Offices.