Chapter 13 bankruptcy, often referred to as a “wage earner’s plan,” provides individuals with regular income an opportunity to restructure and repay their debts over a three- to five-year period. This option is particularly beneficial for those who want to keep their assets, such as a home or car, while addressing their financial challenges.
How Chapter 13 Bankruptcy Works
When you file for Chapter 13 bankruptcy, you propose a repayment plan to the court detailing how you intend to pay back your creditors over time. Payments are made to a court-appointed trustee, who then distributes the funds to creditors according to the approved plan. This allows you to catch up on missed payments for secured debts, like mortgages or car loans, while also addressing unsecured debts, such as credit cards and medical bills.
Unlike Chapter 7, which involves liquidating assets, Chapter 13 focuses on debt reorganization, enabling you to retain valuable property while adhering to a structured payment schedule.
Key Benefits of Chapter 13 Bankruptcy
- Avoid Foreclosure: Allows you to catch up on missed mortgage payments and save your home.
- Protect Assets: Retain non-exempt property that might be sold in a Chapter 7 case.
- Consolidated Payments: Combine multiple debts into a single, manageable monthly payment.
- Stop Collection Actions: Prevents wage garnishments, repossessions, and creditor harassment.
- Debt Discharge: At the end of the repayment plan, some remaining unsecured debts may be discharged.
Who Qualifies for Chapter 13 Bankruptcy?
To be eligible for Chapter 13, you must:
- Have a regular income to make payments under the repayment plan.
- Not exceed debt limits (as of 2024, approximately $2.75 million combined for secured and unsecured debts).
- Be up-to-date on tax filings and meet other legal requirements.
Why Choose DaMore Law for Chapter 13 Bankruptcy?
At DaMore Law, we understand the stress and uncertainty that financial difficulties can bring. Our experienced attorneys will:
- Analyze your financial situation to determine if Chapter 13 is the right solution.
- Guide you through every step of the filing process.
- Develop a repayment plan that aligns with your financial capabilities and goals.
- Advocate for your interests in court and with creditors.
Take Control of Your Financial Future
If you are struggling with debt but want to protect your assets and regain control of your finances, Chapter 13 bankruptcy may be the solution you need. Contact DaMore Law today for a confidential consultation. Our team is committed to helping you achieve a fresh financial start and peace of mind.