Chapter 13

Chapter 13 Bankruptcies are typically referred to as a reorganization bankruptcy.  This is because it enables you to reorganize your debts into a repayment plan.  Chapter 13 Bankruptcy also allows you to catch up on the past due payments for a home mortgage or a car loan. This plan can last anywhere between 3 and 5 years depending on your income and the debts that you need to pay.  So for example, if you owe $5,000 on overdue mortgage payments, this past debt will be divided over the term of the repayment plan.  One of the major benefits of a Chapter 13 bankruptcy is that it enables you to maintain ownership of your property while your finances are brought under control.  Additionally, filing a Chapter 13 case protects you from the constant creditor harassment. Our office has handled many cases where a house was in foreclosure for a variety of reasons (illness, divorce, loss of employment) and the foreclosure was stopped so the Client could get back on their feet.  In some instances, if you file a Chapter 7 Bankruptcy, if you have too much equity in your home, the trustee could ask the Court to have the property sold to satisfy your debts.  Under Chapter 13 this is not the case.