Chapter 13 halts home foreclosures and allows the debtor to catch up on missed mortgage or car payments. Sometimes, car payments can be lowered. Chapter 13 allows the debtor to repay outstanding debts under more favorable terms. This process is called restructuring and can result in lowering or eliminating interest on the debt, and/or reducing the outstanding debt.  Chapter 13 is applicable to a debtor who has a regular income and will be able to make scheduled payments.

While the attorney will safeguard your interests, the entire process is carried out under the supervision of the courts.  A written Chapter 13 plan is created giving details of all the transactions that will occur along with a time frame. In most cases, a trustee will collect the payments and disburse money to the creditors as per the plan.

There are a couple advantages to filing Chapter 13 over Chapter 7. If you complete all the necessary payments in the court approved payment plan, you may be given a full discharge on certain debts not dischargeable under Chapter 7.  Another advantage of the Chapter 13 filing is that a repayment can be created even if creditors disagree with it, as long as the Court approves it. Creditors are able to file an objection, your attorney will respond, and the Court will make the final decision regarding repayment.

To file Chapter 13, you must file as an individual, not as a business.  However, you will be able to include business related debts for which you are personally liable.  You must be current on your income tax filings and meet certain requirements concerning your income and debt levels.

Call Attorney R. Michael Smith for an appointment.  He will carefully discuss your specific situation and possible application of Bankruptcy law to your circumstances.

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