CH 13 Bankruptcy Denver
A Chapter 13 Bankruptcy allows you to create a repayment plan to repay all or part of your debt. The repayment plan you propose must show how you will make installments to creditors over three to five years. However, only the court can allow the repayment plan to take more than three years. The amount of time needed for the repayment plan is determined by your income and expense. Your remaining debt will be discharged if you make all the payments required under the Chapter 13 plan.
A Chapter 13 is mostly for individuals who earn a regular income or have too much money to qualify for a Chapter 7. Like most other bankruptcy processes, Chapter 13 bankruptcy can be very complicated but an experienced lawyer can help you through the process.
Deciding Whether To File A Chapter 7 Or A Chapter 13 Bankruptcy
Your income is what actually determines what type of bankruptcy will be recommended for you. A debtor making too much income will very likely be pushed to file a Chapter 13 instead of a Chapter 7. The following are the types of debts dischargeable in a Chapter 13 bankruptcy:
- Civil fines and penalties
- Divorce decree debts
- Debts incurred to pay non dischargeable federal taxes
- Welfare repayment obligations
- Utility bills
- Personal loans
- Credit card debt
- Medical bills
Just like a Chapter 7, a Chapter 13 also prevents any collection efforts by creditors. This means that:
- Creditor cannot sue the debtor
- Creditors cannot call the debtor
- Creditors cannot harass debtors in any way
- Creditors cannot garnish wages
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Chapter 13 Confirmation Hearing
A confirmation hearing happens three weeks after a Meeting of Creditors. At this hearing, the debtor’s attorney and the Trustee will make presentations before the judge. If there is any dispute that was not resolved in the Meeting of Creditors, it can be resolved at the Confirmation Hearing. But in most cases parties come to an agreement and do not take any disputes to the hearing. The judge signs off on the Chapter 13 plan if there are no disputes and the debtor makes the payments to the Trustee.
A Chapter 13 Payment Plan
A Chapter 13 payment plan allows you to get back control of your finances. It gives you back control because it:
- Allows you to pay back only what you can afford. Your monthly payments are based on your income after expenses
- Your creditors cannot opt out of the plan and if a creditor opts out, its debt will be discharged
- The plan lasts 36-60 months
- You are able to create a budget that meets your living expenses and pay your creditors
- All remaining debt is eliminated at the end of the Chapter 13 payment plan
Protect Your Property
A Chapter 13 payment can do certain things that a Chapter 7 cannot. These include:
- Rescue your home from foreclosure
- Prevent repossession of your car
- Pay back tax debt ahead of other debts
A Chapter 13 can also protect third parties who are liable with the debtor on “consumer debts”.
