If you need to stop a foreclosure, pay off tax debts, or restructure certain debts which are not dischargeable in chapter 7 bankruptcy; or if you are ineligible for a chapter 7 case without a presumption of abuse; you may consider filing a chapter 13 case. We have successfully confirmed plans for over 200 debtors in chapter 13 cases.
A Chapter 13 bankruptcy allows you to restructure debts which are not dischargeable in bankruptcy so that you can begin rebuilding your credit and regaining financial solvency. If you have regular income, but are in foreclosure or behind on your mortgage payments, car payments, taxes or child support payments and need time to catch up on the payments, you may wish to consider filing a Chapter 13 bankruptcy case. Depending upon your ability to pay, you may be required to repay some of your dischargeable debts (such as credit cards and medical bills) in a Chapter 13 bankruptcy case.
Chapter 13 bankruptcy is designed to allow consumer debtors to repay only the amount of unsecured debt that they can reasonably afford to repay over a three to five year term. A Chapter 13 bankruptcy case may be appropriate if you do not qualify for Chapter 7 bankruptcy, or if you owe arrearages on a mortgage and would like to keep your home, or if you own a small business and need to restructure your personal and business debt. Chapter 13 bankruptcy is not available to corporations or other business entities.
One important advantage of a Chapter 13 bankruptcy is that in some circumstances it is possible to “strip” a second mortgage or home equity line of credit if the value of your house has declined so that your home is worth less than you owe on your first mortgage. When a second lien is “stripped,” the lien is included as unsecured debt in your Chapter 13 case, so that if you make it through a three to five year repayment plan, the balance of your unsecured debt (including the “stripped” amount) is discharged.