Bankruptcy Basics Week 3: What is Chapter 13?
September 28th, 2015
Chapter 13 is a reorganization form of bankruptcy that addresses debts not addressed by Chapter 7. Chapter 13 gives debtors a means to catch up missed mortgage payments interest and penalty free over an extended period of time (as opposed to the lump sum catch-up that can be demanded to stop a foreclosure proceeding outside of bankruptcy). Chapter 13 can also help with repayment of non-dischargeable income tax and child support obligations and can allow a debtor to pay back a car loan based upon the vehicle’s actual value, as opposed to what is owed on the vehicle. Unsecured debts like credit cards, medical debts, and delinquent utilities are repaid at a percentage of what is actually owed. The amount paid back in Chapter 13 is based upon the debtor’s ability to pay. This can be as little as a penny on the dollar depending on the circumstances. If you or someone you know is facing challenges with overwhelming debt, please call us to schedule a free appointment to discuss how we can best help you to a financial fresh start.