Bankruptcy Benefits – Reorganize Debt Chapter 13 Bankruptcy

Chapter 13 bankruptcy is sometimes called “reorganization” or “wage earner” bankruptcy. It is different than Chapter 7 bankruptcy, in which property may be liquidated. Chapter 13 bankruptcy allows for non-exempt property to be retained while using a payment plan, which can help reorganize debt.

Is Chapter 13 right for you? Chapter 13 can be an excellent option for individuals and families who have both significant income and significant unsecured debt. It is also a good option to avoid a foreclosure.

Under this plan, a debtor proposes a repayment plan to the court that details a structure of repayments that may cover a three-to-five year period. This restructuring enables debt payments to be reduced, property to be retained, and garnishments, creditor harassment and repossession to be halted. Chapter 13 is also highly effective in immediately halting foreclosure proceedings and providing a way to get current on your mortgage payments.

Chapter 13 requires the payment of secured debts and certain other obligations, such as child support, alimony, car and house payments, taxes, and criminal fines. However, general unsecured debts receive a percentage of what was owed, and the rest is discharged. The debtor pays the plan payment with disposable income, which is the income left each month after living expenses are paid

Working with an attorney from Johnson Law, PLLC under Chapter 13, creditors cannot collect or attempt to collect on pre-existing debt except through the court. At the end of the plan, the debtor has retained his or her property and is free of the excess dischargeable debt. Working out a restructuring and payment plan carries many benefits. It does, however, have its limits. Adequate disposable income must exist to pay all that is required to be paid in the plan.

To fully understand your Chapter 13 bankruptcy options, speak to an attorney at Johnson Law, PLLC. We offer free initial consultations, and can gather the facts of your case to determine your best options and present a no-obligation recommendation for your best course of action. We offer flexible appointments and payment plans, and charge affordable rates. To discuss your bankruptcy options, contact us at 304-292-7933.

If you suffer from burdensome debt, are threatened with foreclosure, are harassed by collection agencies, have wages garnished, or have been injured, then call us. Johnson Law, PLLC charges affordable rates, offers weekday, weekend and evening appointments, as well as flexible payment plans and no obligation consultations. Contact us at 304-292-7933.