Chapter 13

Chapter 13 Bankruptcy: An Interest-Free Repayment Plan

Chapter 13 bankruptcy is similar to a loan consolidation plan, except that you typically pay back less than you owe and your payments are made to the Bankruptcy Court Trustee over a protection period of 3-5 years. During that time, you avoid the further accumulation of interest payments on your debt, and the amount that you have not paid at the end of that period is forgiven.

Chapter 13 is appropriate for those who:

  • Have significant equity in a home or other property that they would like to keep.
  • Have regular income and can pay for normal living expenses, but not all of the scheduled payments on debts.

In order to qualify for Chapter 13 bankruptcy, the individual debtor must have unsecured debts (like credit card debts) below $350,475 and secured debts (like mortgages and car loans) below $1,081,400.

What will Chapter 13 Bankruptcy Do For You?

When you file for Chapter 13 bankruptcy, you:

  • Receive immediate relief from contact with creditors. During the “protection period,” all contact is through the Trustee.
  • Save your home from foreclosure.
  • Remove unsecured 2nd and 3rd mortgages.
  • Retain possession of and control over any non-exempt property you may own.

Your personal “reorganization plan,” provides an opportunity to pay back taxes, stretch-out payments on secured loans, and retire your debt over a 3-5 year time period.  Chapter 13 bankruptcy remains on your credit report for 6 years, and you can file once every 4 years.

Contact Bankruptcy Law Professionals of Colorado to get a free consultation and find out if Chapter 13 bankruptcy is a viable method for you to get debt relief and peace of mind.