A chapter 13 bankruptcy is often a perfect solution for a debtor who simply needs some breathing room and time to catch up on payments. A chapter 13 bankruptcy achieves this by requiring the debtor to file a “plan” with the bankruptcy court. This plan outlines how the debtor will pay back a portion of his or her debt. Chapter 13 should be considered when a debtor has consistent income and assets that might be lost in a liquidation under chapter 7. To be eligible for a chapter 13 bankruptcy, a debtor must have less than $360,475 of unsecured debt and less than $1,081,400 of secured debts.
Another benefit of a chapter 13 bankruptcy is that it allows the debtor to consolidate all debts into one payment. This payment is made to a bankruptcy trustee, who then distributes the funds to the creditors. Additionally, the payment will be a fixed amount, which makes it easier to create a budget for all other expenses. The payment plan lasts 3 to 5 years, after which the debtor is free from that burden. At Carr Law, we negotiate hard to minimize the monthly payment. We are aggressive in asserting the rights of our clients. Give us a call and talk to an attorney about your situation.