Bankruptcy Lawyer | What is Chapter 13 Bankruptcy?
Bankruptcy Lawyer . Chapter 13 bankruptcy is also known as “wage earner” bankruptcy because, in order to file for Chapter 13, you must have a reliable source of income that you can use to repay some portion of your debt.
Repayment
When you file for Chapter 13 bankruptcy, you must propose a repayment plan that details how you are going to pay back your debts over the next three to five years. The minimum amount you’ll have to repay depends on how much you earn, how much you owe, and how much your unsecured creditors would have received if you’d filed for Chapter 7 bankruptcy. See our section on The Chapter 13 Repayment Plan to get in-depth information. If you’re thinking about Chapter 13 bankruptcy, the Chapter 13 Plan Payment Calculator can tell you what the minimum monthly payment might be.
Debt limits. Your debts must be within limits set by the federal government: Currently, you may not have more than $1,149,525 in secured debt and $383,175 in unsecured debt.
Secured debts. If you have secured debts, Chapter 13 gives you an option to make up missed payments to avoid repossession or foreclosure. You can include these past due amounts in your repayment plan and make them up over time. To get a better understanding of how Chapter 13 can help with secured debts, see Nolo’s sections on Your Home and Mortgage in Chapter 13 Bankruptcy and Reducing Loans and Non-Residential Mortgages in Chapter 13 Bankruptcy.
For more information on Chapter 13 bankruptcy, see Chapter 13 Bankruptcy: Repay Your Debts, by Stephen Elias.
Other Types of Reorganization Bankruptcy
In addition to Chapter 13 bankruptcy, there are two other types of reorganization bankruptcy: Chapter 11 and Chapter 12.
Chapter 11 bankruptcy. Chapter 11 is typically used by financially struggling businesses to reorganize their affairs. It is also available to individuals, but because Chapter 11 bankruptcy is expensive and time-consuming, it is generally used only by those whose debts exceed the Chapter 13 bankruptcy limits (rare) or who own substantial nonexempt assets (such as several pieces of real estate). If you are considering Chapter 11 bankruptcy, you’ll need to talk to a lawyer.
Chapter 12 bankruptcy. Chapter 12 is almost identical to Chapter 13 bankruptcy. But to be eligible for Chapter 12 bankruptcy, at least 80% of your debts must arise from the operation of a family farm of fishery. Chapter 12 bankruptcy has higher debt ceilings to accommodate the large debts that may come with operating a farm, and it offers the debtor more power to eliminate certain types of liens. Very few people use Chapter 12 bankruptcy; if you want to join their ranks, you should consult with a bankruptcy lawyer. -nolo
Is Chapter 13 bankruptcy right for you? Contact Jacksonville’s bankruptcy lawyer today at Pinkston & Pinkston.