Chapter 13


Definition:

Chapter 13 bankruptcy is a proceeding for individuals (and their spouses) with regular income who have unsecured debts of less than $307,675 and secured debts of less than $922,975. A Chapter 13 bankruptcy is known as a reorganization proceeding, whereby the debtor will attempt to repay some debt and retain non-exempt assets.

Many debtors use a Chapter 13 to repay debts they have fallen behind on such as mortgage payments or certain types of tax debt. In a reorganization case, the debtor will normally have anywhere from three to five years to repay a portion of his or her debt. Repayment in Chapter 13 can range from 10% to 100% depending on what type of debt the individual has and the amount of his or her income.

Reasons for filing...

Reasons for filing a Chapter 13 bankruptcy include protecting homes from foreclosure or cars from repossession, a sincere desire to repay debt or a potentially less onerous effect on the ability to obtain new credit. The Chapter 13 debtor’s reorganization is achieved by the proposal of a repayment plan to the bankruptcy court, which if successfully performed entitles the Chapter 13 debtor to retain non-exempt assets and receive a discharge of any remaining debt after completion of the repayment plan.

More Information:

If you would like to discuss options available to you under Chapter 13 of the United States Bankruptcy Code, please contact Attorney John M. Hyams at 717-533-3280 or via e-mail at jmh@jsdc.com.