Chapter 13 FAQ

How does a Chapter 13 differ from a Chapter 7?

  • In a Chapter 7 case the debtor’s nonexempt property is sold to pay as much of the debts as possible. In a Chapter 13 case a portion of the debtor’s future income is used to pay as much of the debt as is feasible.

What is a Chapter 13 plan?

  • A plan presented to the bankruptcy court by a debtor that states how much money or property the debtor will pay to the Chapter 13 trustee, how long payments to the trustee will continue, and the amount paid to each creditor.

Must all debts be paid in full under a Chapter 13?

  • Some debts, such as child support obligations and taxes must be paid in full. Only the amount that the debtor can reasonably afford must be paid on other debts. The unpaid balances of most debts are wiped out upon the completion of the plan.

How long does a Chapter 13 plan last?

  • Typically a Chapter 13 plan will last between 3 and 5 years.

May a husband and wife file a joint case?

  • A husband and wife may file a joint Chapter 13. If both spouses are liable for any large debts, they should file a joint Chapter 13. If both spouses have regular income, they should file a joint case.

For more information about Chapter 13 Bankruptcy, Click here.

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