Chapter 13 Bankruptcy

What is a chapter 13 bankruptcy?
A chapter 13 bankruptcy is a partial repayment for debt for regular income earners. Under a chapter 13 plan you propose a repayment plan that allows you to make installment payments on your debt for 3-5 years.

Who qualifies for a chapter 13?
Many factors affect whether or not you can qualify for a chapter 13 bankruptcy. These factors include your income, the amount of your debt, whether you have ever filed a bankruptcy, etc. But you must have regular income to qualify for this type of filing.

What debt can you eliminate?
Debt typically falls into two categories secured and unsecured. Secured debt is debt that is attached to an object such as a home or vehicle. Unsecured debt is typically not attached to any tangible objects such as credit card debt. When filing bankruptcy most unsecured debt can be eliminated. Secured debt can typically only be eliminated if you surrender the property it is attached to. A Chapter 13 bankruptcy can also allow you keep assets for which you are currently behind on the payments. For example under a Chapter 13 repayment plan you can catch up on your missed mortgage or car payments and still retain the asset.
 
What debt can not be eliminated?
In most cases debt owed for school loans, unpaid taxes and child support obligations will not be eliminated through a bankruptcy action.

How does a Chapter 13 bankruptcy work?
After you complete all required bankruptcy schedules and forms you file your paperwork with the Federal Bankruptcy Court which is located in Las Vegas. You then create a plan to repay your creditors. This plan will be either 3 or 5 years depending upon your income level. A bankruptcy trustee will then be assigned to you case. The job of the bankruptcy trustee is to step into your shoes and determine which assets are protected or excluded form bankruptcy or if you have any assets that can or should be sold to repay your creditors.
You will be required to attend at least one hearing at the Courthouse where you will be questioned about your assets, debts and your chapter 13 bankruptcy filing. The intent of this hearing is not to harass or embarrass you, but to evaluate your case for debt dismissal. After the Bankruptcy Court has confirmed your repayment plan, you enter the repayment phase. After your plan has been completed you are discharged or released from their debt.
 
What assets are protected in a chapter 13 bankruptcy?
While there is a very long and complicated list of protected assets or exclusions in a Chapter 13 typically your home, vehicle, retirement accounts such as 401Ks and IRAs are protected. Within some federally mandated limits you will not be forced to relinquish these assets in a chapter 13 bankruptcy action.

How does filing a bankruptcy stop creditors from harassing you?
From the day you file a bankruptcy action the harassment of creditors will stop. When you file for a bankruptcy an automatic stay is placed upon the creditors. That means they can not foreclose on your home, make harassing phone calls to you, send you threatening letters, or continue collection efforts against you. The bankruptcy stay order is one of the strictest orders in the United States Court System, and the creditors can be imposed huge fines for violating the stay orders.
 
What are the advantages to filing a Chapter 13 bankruptcy?
The Chapter 13 bankruptcy action allows you to keep assets in which you are currently behind in the payments. So a Chapter 13 can save your home from a foreclosure. You may also be able to eliminate second or third mortgages. 

Why a Chapter 13 bankruptcy may be right for you?
Bankruptcy is a federal mandated way for individuals to get out from overwhelming weight of debt. You can eliminate your unsecured debt, keep your assets and start over. During these hard economic times everyone has taken a financial step back, especially here in the Las Vegas area. The best way to help your self is to deal with your issues of debt now so that you can set your self up for a better financial tomorrow.

Filing a bankruptcy action is an important decision with financial and legal ramifications. It is important to consult with an attorney before you file to determine whether or not filing a bankruptcy is right for you. This information is provided for informational purposes only. It is not legal advice and does not constitute an attorney client relationship.