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Chapter 13 Bankruptcy

image Chapter 13 bankruptcy, sometimes called a reorganization bankruptcy, differs from Chapter 7 in that a debtor will be allowed to keep most of his assets in exchange for creating and abiding by a three or five-year payment plan.  The bankruptcy Trustee oversees the plan and distributes a portion of the payments to each of the debtor’s creditors.  After the plan is successfully completed, any remaining debt will be discharged.

To qualify for a Chapter 13 bankruptcy, a debtor must have a current income, and his combined debt must not exceed a certain limit.  Like the Chapter 7, the Chapter 13 begins by filing a petition with schedules detailing the debtor’s debts, income, assets, exemptions, and expenses.  A plan is then formulated to determine how much the debtor must pay each month.

Other than the payment plan, the Chapter 13 process is very similar to the Chapter 7 process once the debtor’s petition is filed. Review the Chapter 7 process by clicking here.

The Chapter 13 bankruptcy is just as complex as the Chapter 7, if not more so as it extends over several years before a discharge is granted.  The attorney’s at Slemboski & Tobler have helped debtors in all types of situations traverse the necessary paperwork and successfully negotiate a discharge.  If you believe you can benefit from bankruptcy protection, please contact our office for a free initial consultation to discuss your specific case.

Also, if you would like to read more about the bankruptcy process, click here to view the complete Bankruptcy Code.