Chapter 13 Bankruptcy

General Principals of Chapter 13

The following are some general principals of a Chapter 13 Filing: (This is not an all inclusive list, should not be construed as legal advice, and you should consult with an attorney)


  • Chapter 13 Bankruptcies make the most sense when you are behind on your first mortgage, and want to use a 3-5 year Chapter 13 plan to catch up on the arrears.

  • Chapter 13 Bankruptcies also make sense for individuals with significant priority tax liability that they need to pay, and cannot do Chapter 7 Bankruptcies.

  • Chapter 13 Bankruptcies also make sense in some instances for individuals that want to strip consensual liens, but don’t want the expense and complexity of a Chapter 11 case.


Eligibility

  • The Debt limits just went up as of April 2010, so be careful what you trust on the Internet.

  • You cannot have more than $1,010,650.00 in secured debt.

  • You cannot have more than $336,900.00 in unsecured debt.

  • Wholly unsecured liens that are secured at the time of filing are considered unsecured debt by most bankruptcy courts.


General Considerations

  • Are you behind on a mortgage or deed of trust payment? If so, using a Chapter 13 to cure arrears as to a creditor is doable in a Chapter 13.

  • Is Chapter 13 available to corporations? NO, only individuals.

  • Do you need regular income? YES. Some courts hold that regular rental income can be construed as regular income. Others disagree.


Process

We have created informational materials that we can send you after the initial consultation regarding the process of a Chapter 13. Typically, you make one appearance at a meeting of creditors. There is a confirmation hearing about one month thereafter. If you have complied with all your requirements under the bankruptcy code, your plan can be confirmed.