Bankruptcy Chapter 13
Chapter 13 bankruptcy is known as a reorganization bankruptcy. This type of bankruptcy is used by 25% of consumers. When consumers file Chapter 13 bankruptcy they usually want to pay off their debts over a three to five year period. This type of bankruptcy appeals to those who have non-exempt property that they want to keep. The amount of repayment can range from as little as 10% to 100% depending on the debtors' income and the amount owed.
When You Should Consider Chapter 13
- Your disposable income is too high to qualify for Chapter 7.
- You are behind on your mortgage and need to catch up.
- You have assets you want to protect that would be liquidated under Chapter 7.
- You owe "priority" debts that could not be discharged under Chapter 7, such as taxes or child support.
- You filed Chapter 7 within the last 8 years, or you want to leave the option of filing Chapter 7 within the next 8 years.
- You have a co-signer whose interests you are trying to protect.
To qualify for Chapter 13 an individual may not exceed $336,900 in unsecured debts and $1,010,650 in secured debts. The payments are made to the secured creditors first based on their interest and priority.
