Chapter 13 Bankruptcy | What Is Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy | What Is Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy | Chapter 13 is a bankruptcy option that provides a debtor with regular income the ability to pay off debts over time,

generally three to five years. The length of time the debtor has to repay the debts is governed by the debtor’s income

relative to the median income of his or her state. Another term one might see if one is considering filing for Chapter 13

bankruptcy protection is “wage earners plan.” Under 11 U.S.C. § 1322(d), no repayment plan under Chapter 13 may be

longer than five years.

Under the provisions of Chapter 13, a debtor may keep assets that would normally be sold under Chapter 7, such as a

home or vehicle. Over the last eight years, many mortgage owners have taken advantage of Chapter 13 protection to

avoid foreclosure. Chapter 13 also offers protection to co-signers and others who are liable for “consumer debts.”

Depending on the specific case, a debtor may be able to consolidate multiple debts into a single amount at a greatly

reduced rate of interest. Chapter 13 is also available to individuals and couples who have tax debt that cannot be

discharged in Chapter 7.

Individuals or couples who are self-employed or run a business can qualify. Current unsecured debt limits, which are

subject to change, must total $383,174 or less. Secured debts, such as mortgages (on personal or business property if the

property is owned by an individual or couple) and/or car loans, must total $1,149,524 or less.

It is never a good idea to go at it alone when in filing bankruptcy. It would be wise to consult with a bankruptcy lawyer

who can advise one on the best course of action relative to one’s particular situation. D. Max Gardner is a certified

specialist in Bankruptcy law by the California State Bar Board of Specialization serving clients in Kern and Inyo County.