A Chapter 13 bankruptcy enables individuals with a regular income to propose a repayment plan to repay all or part of their debts. In many cases, Debtor obtains a complete discharge of all dischargeable unsecured debts and may have to repay only part of their debts. Of course, some debtors will have a sufficiently high income to repay their debts in full during the plan period. The payments to the creditors are generally over a three-year (36 months) or five years (60 months) period. During the repayment period, the law forbids creditors from starting or continuing collection acts. This includes lawsuits, wage garnishments, and phone calls; Chapter 13 can also stop collection acts directed at the debtor’s property.
Frequently, the reason that most debtors (who can be a single person or a married couple, but not business entities) decide to file a chapter 13 bankruptcy is that the debtors are not eligible to file a Chapter 7 bankruptcy. Chapter 7 is a liquidation bankruptcy in which there are no repayments; however, there is an income ceiling for Chapter 7. The income ceiling is based on the state’s median income for the household size of the debtor(s). Debtors that earn over the income ceiling for their household size must file Chapter 13. However, even debtors who make below the income ceiling for their household size may choose to file a Chapter 13 bankruptcy because there are certain advantages with Chapter 13 that are not available in Chapter 7. These advantages include:
Chapter 13 is a complex statute. You should have a competent attorney, and not attempt to represent yourself in a bankruptcy proceeding.
I can design the plan so most of my fee is paid out of the plan payments. I am an experienced Chapter 13 bankruptcy attorney, and I represent individuals who want to file in the Colorado Springs metropolitan area (including El Paso and Teller counties) and the Denver metropolitan area (including Denver, Douglas, Arapahoe and Jefferson county). I have offices in Colorado Springs and Denver.
A Chapter 13 plan can be modified for changed circumstances and has a provision for a hardship discharge. I am experienced in modifications, and I can assist you if your plan needs to be modified.
Please call me to discuss your circumstances or email me to arrange a consultation.