Chapter 13 Bankruptcy
A Chapter 13 Bankruptcy is commonly referred to as a “Reorganization of Debts” or a “Payment Plan Bankruptcy.” You may want to consider Chapter 13 if you have significant equity in a home or other property and you want to keep it and/or you have regular income and can pay your living expenses, but you can’t keep up the scheduled payments on your debts.
The advantages to a Chapter 13 Bankruptcy are that you can keep most of your property while spreading out time to pay past due accounts. You can also strip liens on your home in a Chapter 13 Bankruptcy.
You’ll have 3-5 years to catch up delinquent accounts according to a schedule that you and the bankruptcy trustee have agreed is workable for you and you’ll make one monthly payment to the bankruptcy trustee for distribution. You’ll have no direct contact with creditors during the protection period of 3-5 years.
Individuals whose unsecured debts are below $336,900 and whose secured debts are less than $1,010,650 can file a Chapter 13 Bankruptcy.