A Chapter 13 Bankruptcy is also called a wage earner’s plan. Debtor(s) propose a repayment plan to make installment payments to creditors over a period of three to five years. If debtor’s current monthly income is less than the applicable state median, the plan is for three years. If current monthly income is above the applicable state median, the plan is for five years.
Most significantly, Chapter 13 offers debtor(s) the opportunity to save their home from foreclosure and cure delinquent mortgage payment over time. Debtor(s) must also pay postpetition mortgage payments outside the plan directly to the mortgage holder.
To be eligible for Chapter 13, debtor’s unsecured debts must be less than $360,475 and secured debts less than $1,081,400. There are no such limitations in a Chapter 7 Bankruptcy.
Retaining the services of a bankruptcy attorney is absolutely necessary for the successful commencement and completion of debtor’s Chapter 13 Bankruptcy. Furthermore, retaining the services of an attorney is most important to guide the debtor(s) through the maze of paperwork that a Chapter 13 Bankruptcy entails and to determine if a Chapter 13 Bankruptcy is right for you.