Chapter 13 Bankruptcy

A Chapter 13 bankruptcy, often called a wage earner plan, allows individuals with regular income to eliminate debts with a plan to repay part or all of their debts.  A Chapter 13 plan lasts three to five years depending on an individual’s income and discharges all debts that can be discharged in Chapter 7. 

An advantage of Chapter 13 is that it provides the ability to retain non-exempt property and to cure defaults for leases, real estate taxes, and mortgages so that people can avoid eviction or save their home or car from foreclosure or repossession.  Chapter 13 is also helpful for self-employed, sole proprietors that wish to stay in business but would lose business assets in a Chapter 7 liquidation.  Chapter 13  also discharges some debts not discharged by Chapter 7, such as a property settlement related to a divorce proceeding.

A Chapter 13 plan payment is usually determined by the disposable income after reasonable and necessary expenses are deducted from earnings.  Most Chapter 13 plans result in a very small repayment to unsecured creditors.  Although there are limits to the amount of debt a Chapter 13 debtor may have, the biggest limitation is usually whether it is feasible to afford the payment it takes to retain expensive property.

Many attorneys overlook the advantages of Chapter 13, but we are pleased by the results obtained for our clients who file Chapter 13.  As part of every free evaluation, we will point out any advantages of Chapter 13 using our experience filing thousands of Chapter 13 cases in Columbus, Ohio.