Chapter 13 Bankruptcy


The United States Bankruptcy Court – District of Colorado describes a Chapter 13 Bankruptcy as:

Chapter 13, entitled Adjustment of Debts of an Individual With Regular Income, is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to Chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a “plan” to repay creditors over time – usually three to five years. Chapter 13 is also used by consumer debtors who do not qualify for chapter 7 relief under the means test.

The repayment plan is the basic difference between a Chapter 7 and a Chapter 13 bankruptcy.  In the case of a Chapter 13, you and your attorney will develop a payment plan by which you will, through the trustee, make payments to you creditors.  These payments are made over a three to five year period.

In a Chapter 13 filing, the debtor is typically allowed to keep their assets, in addition more debt are able to be discharged under a Chapter 7.

You will have to appear before the bankruptcy court and have you plan approved.  The bankruptcy will not be discharged until you have completed the payments agreed to under the plan.

How much will I have to pay?

The Jim Leerssen will review the rules for expenses based on family size and help you determine what the courts will require in monthly payments.  In general the court will require you to pay 100% of your disposable income, after your expenses have been met.  Again this is a complicated issue and one that you should not attempt yourself.  We have years of experience in working with clients and no two cases are alike.




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