Chapter 13

Chapter 13 Bankruptcy is a form of Bankruptcy designed to help consumer keep their homes and valuable property by structuring a repayment plan supervised by the Bankruptcy court. The plan is designed to help the consumer manage a payment schedule to pay mortgage or other areas on property secured by a loan. The plan consolidates the debt into a monthly payment schedule. The length of payment plans range from three to five years.  (plans have to be completed in that time frame).

In Chapter 13 Bankruptcy allow the consumer keeps all of his property, whether the property is considered “exempt”, under the Bankruptcy code or not.  The debts in a Chapter 13 bankruptcy fall into two categories: secured and unsecured. Secured debts are most commonly those in which something is pledged as collateral for a loan in the event you fail to repay the debt. The most common are home mortgages and auto loans. In Chapter 13 Bankruptcy if at the time of filing of your Bankruptcy Petition you are in default on an auto loan or facing foreclosure this action will stop the seizure of you asset and provide a workable schedule to pay off the arrears. The second types of debts under Chapter 13 bankruptcy are unsecured debts.  Unsecured debts are those that you have not pledge as anything as collateral. Common examples of unsecured debts are credit card debts and medical bills. In many instances depending on your income and expenses you could pay as little as 10% of this unsecured debt back.

It is important to note that in a Chapter 13 Bankruptcy as in a Chapter 7 Bankruptcy certain debts are not dischargeable and are given priority. These include child support arrears, alimony areas, certain taxes, criminal fines and all debts reduced to judgment.

If you are faced with foreclosure, auto repossession, creditor harassment or excessive medical or credit card debt, call Schnitzer Anderson, LLC today at 410-216-3325. Remember at Schnitzer Anderson, LLC, you meet with an experienced Bankruptcy attorney and the consultation is always free.

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