What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, often referred to as a wage earner’s plan or reorganization, is a type of bankruptcy relief that allows a debtor to pay off the debt over time, while retaining assets. Under Chapter 13 bankruptcy, debt is reorganized and repaid in whole or through an agreed payment plan and may apply to individuals or businesses.

Any debt repayment plan must be approved by the court and could last up to five years, depending on whether the debtor’s monthly income is above or below the applicable state median. Once filing for protection under Chapter 13 of the U.S. Bankruptcy Code, a debtor is protected from collection efforts, lawsuits, and contact by creditors. This protection lasts for the duration of the repayment plan.

Interested in finding out if Chapter 13 bankruptcy may be right for you? Contact Pearson Butler to speak with a skilled Utah bankruptcy lawyer. The firm has handled over 5,000 bankruptcy cases.

Advantages of Filing for Chapter 13 in Utah

A Chapter 13 reorganization may offer a debtor certain benefits over a Chapter 7 liquidation. Under Chapter 13, you may be able to:

• Save your home from foreclosure
• Keep your company’s doors open while you restructure and repay debt
• Reschedule and lower payments on secured debts
• Protect third parties who are also liable for your debt
• Avoid any and all contact with creditors

Every individual or business seeking bankruptcy protection will have different concerns and long-term goals, and that is why it is so important to consider all of your options before you file.

5 Things to Know About a Chapter 13 Bankruptcy

1.) If you do not own a home and would like to purchase a home while in your Chapter 13 bankruptcy, you have several options. The minimum time requirement is that you need to have been in your case for over 12 months and have a spotless payment record on your bankruptcy payments.

2. ) f you own a home, you may be eligible for a refinance or loan modification. I’d be happy to sit down with you and discuss your options. If you want to do that, I need to know what your current interest rate is. You must be current on your bankruptcy payments.

3.) Are you having car trouble? You may finance the purchase of a vehicle while in your chapter 13 bankruptcy. You must be current on your bankruptcy payments. Set an appointment with me to discuss your options.

4.) If you are in a Chapter 13 bankruptcy and are not paying back all of your creditors in full (a 100% plan), you have a tax obligation for at least the first three years of your case (some for all 5 years). A letter will be sent out to you in January reminding you to provide me with copies of your tax returns as soon as you prepare them. I will provide those tax returns to the trustee. If you have refunds of over $1000, I will analyze the returns and let you know how much of the refund you get to keep and how much the trustee will be expecting.

5.) If you are going to be late in making your payment to the trustee, I do not need to know this. If you are going to miss a payment or need to miss multiple payments, you should set an appointment with me to discuss your options. You may be able to abate (put at the end of your case) a few payments. This sometimes causes your bankruptcy payment to increase.

Choosing Between Chapter 7 and Chapter 13 Bankruptcy

When you file for Chapter 7, your assets will be assessed, protected, and most or all of your debts will be discharged.

Chapter 13 bankruptcy also examines your financial situation at the time of filing but focuses more on a repayment plan for any secured debt you are behind on while also discharging most or all unsecured debts.

Our chapter 13 attorney at Pearson Butler can help you find the best bankruptcy option for you.

Take the first step and arrange a confidential consultation with a seasoned Utah Chapter 13 lawyer at Pearson Butler. Give us a call today at (800) 265-2314.