Chapter 13 Bankruptcy Basic Information (part 1)

There are many types of bankruptcies available, but the to most common are Chapter 13 and Chapter 7.  This article will focus on the Chapter 13 bankruptcy.

Chapter 13 BankruptcyNOTE: This article is for informational purposes only and should not be construed as legal advice. Always consult an attorney if you are considering bankruptcy buy viagra in usa.

The Chapter 13 is sometimes call the “wage earners’ bankruptcy,” since is for individuals with a regular income. This type of bankruptcy attempts to adjust an individual’s debt payments to a level that they can afford.

A Chapter 13 bankruptcy allows the debtor to pay off his or her debts over a 3-5 year period. Unlike Chapter 7 which calls for liquidation of a debtor’s assets, a Chapter 13 bankruptcy generally involves no loss of property.

Chapter 13 Bankruptcy Advantages

As mentioned in the previous paragraph, Chapter 13 differs from Chapter 7 in that it does not generally require the debtor to surrender or liquidate their property.  This means  you can often save your home from foreclosure. You may also be able to cure past due mortgage payments.

However, you still have to pay the mortgage.  Chapter 13 bankruptcies generally require that you make your mortgage payments in full and on time during the bankruptcy. Your mortgage company may be able to work with you on a loan modification.

Another advantage is that you may be able to spread your other debts out over a 3-5 year period.  This will often lower the overall amount you are paying each month.

You will make a single payment to the bankruptcy trustee who distributes the money to the various creditors. All contact with creditors is done through the trustee.  This relieves you of the constant threatening calls that can accompany credit problems.

Who is Eligible for a Chapter 13 Bankruptcy?

Chapter 13 is available to individuals with regular income whose debt falls below the maximum values set by US statutes.  These limits are quite high, and are adjusted periodically.  (At the time of this writing, you must have less than $383,175 in unsecured debt, and/or less than $1,149,525 in secured debt.  Source:

The individual must have a regular income, which may be from a regular job, or from self employment or owner of an unincorporated business. Previous filings within 180 days that were dismissed due to noncompliance would make a debtor ineligible.

Most bankruptcy courts also require credit counseling prior to filing for Chapter 13 bankruptcy.  In some cases, this may be waived under and emergency provision, but this is rare.

Watch for upcoming article which will cover more information about Chapter 13 bankruptcy.

Are you wondering if you can buy a car with an active or discharged Chapter 13 bankruptcy? Often you can, and we are here to help.  Use these links to learn more:
Buy a Car While in Bankruptcy or Buy a Car After Bankruptcy

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