Johnson & Bryan Can Help You Understand If Chapter 13 Bankruptcy Is Your Best Option

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Chapter 13 is a repayment bankruptcy.  Chapter 13 bankruptcy is available to consumers to simply make too much money to qualify for Chapter 7.  When you have a steady income but your debts are more than you can pay every month, and you find that you are at risk of losing your home and/or your vehicle, Chapter 13 bankruptcy filing may be the choice for you. 

Chapter 7 vs. Chapter 13

What’s the difference between Chapter 7 and Chapter 13? 
Chapter 7 is bankruptcy with no payment plan set up through the court, in which most of your creditors will receive nothing. Chapter 13 is payment plan bankruptcy where you make payments to the bankruptcy trustee for 3-5 years to repay some or all of your debts. 

When is Chapter 7 better? 
If you are current on your mortgage and car loans and your main problem is credit card debt (or medical bills or repossessed property) then chapter 7 is better. 

When is Chapter 13 better? 
If you are behind on your mortgage or car loans, then Chapter 13 is better because it allows you to restructure those debts through the Chapter 13 payment plan. 
Chapter 13 is generally for people who do not qualify for Chapter 7 (because they make too much money).

How does Chapter 13 work?
We propose a repayment plan to the bankruptcy court that says, for example, you will pay $250 per month for 60 months. 
You make this payment to the bankruptcy trustee’s office, and he uses the money to pay your debts.
Approximately one month after your case is filed, you go to court for your creditors meeting. About 2-3 months after your creditors meeting, you go to court again for your plan confirmation hearing. This is when the judge can approve your payment plan. 
You make payments to the bankruptcy trustee for 3-5 years (according to your payment plan). 
If you fall behind on your payments, the bankruptcy trustee will ask the court to dismiss your case. If your case gets dismissed, you’re right back where you started. 
If you finish your payment plan (after 3-5 years), you get your successful discharge and your case is over with. 
In Chapter 13, your total time in bankruptcy is 3-5 years from beginning to end. 

Why would I file Chapter 13? 
Normally, you would only file Chapter 13 if… 

• You failed the means test and were not eligible to file Chapter 7
• You were facing foreclosure or repossession, or
  
  CALL US FOR A FREE CONSULTATION AT (713)-751-0070!!  YOU CAN ALSO EMAIL US AND CONTACT US ONLINE BY CLICKING ON THIS LINK.