BASIC
BANKRUPTCY INFORMATION
CHAPTER 13
DISCLAIMER
The information contained on this page is for information, only. It is not intended to be legal advice, nor should you make legal decisions based on this information. Please consult one of our attorneys to see how the law applies to your particular situation.
In a Chapter 13 bankruptcy:
-
In a Chapter 13 a person has to pay all of their disposible income to the Chapter 13 Trustee. Disposible income is the money left over after day to day living expenses, such as house payment, utilities, food, etc are paid.
-
Instead of using your disposible income to pay for their debts (car payment, etc) you would pay the money to the Chapter 13 Trustee. The Chapter 13 Trustee would then pay your debts for you.
-
The Trustee pays the secured creditors first. Secured creditors are the ones who have collateral, such as a car. The secured creditors must be paid 100% of the value of their collateral.
-
The unsecured creditors are ones who do not have collateral, such as credit cards, or medical bills. Unsecured creditors can be paid any amount between 100% and 1% of their debt.
-
A Chapter 13 case can last as long as 5 years. By refinancing their debt over this five year period, most people are able to significantly lower their monthly payments.
-
To determine how much your payments can be reduced, please call our office and make an appointment to talk with one of our attorneys.
