Chapter 13 bankruptcy can sometimes be a better option than Chapter 7 .  Debtors may consider this option after negotiation attempts with their creditors fall through or when they need legal assistance in making payments they can afford.

Questions that help determine if the process can help:

  1. What is Chapter 13 bankruptcy? Chapter 13 is court-approved repayment plan that helps debtors repay debt obligations overtime based on their income.
  2. How much will I pay in Chapter 13 bankruptcy? The amount of your payment will depend on your monthly income and the amount of debt you have.  Priority debt and secured debt will be included in your repayment plan. Unsecured debts may be paid based on disposable income or what you have left after paying necessary expenses.
  3. How long will I make payments if I decide to file? The repayment plan will be based on how much debt you have and your ability to make payments. On average, debtors complete the plan within 3 to 5 years.
  4. Can Chapter 13 bankruptcy save my home from foreclosure? Homeowners may find Chapter 13 beneficial in preventing foreclosure .  The automatic stay goes into effect when you file, stopping proceedings.  The filing can help you get caught up on mortgage payments based on what you can pay.
  5. Can I use retirement funds to make payments if it is my only source of income?  If you have a reliable source of income the court can approve your repayment plan.  Different types of income are eligible including retirement funds.
  6. Can Chapter 13 bankruptcy help me pay on back taxes? Yes, the filing can help with income taxes that may not be eligible for discharge under Chapter 7.