Chapter 13 Bankruptcy
An Overview

A chapter 13 case is intended mainly for individuals with steady income, and people who have secured debts that need restructuring. You must have regular monthly income to qualify for a chapter 13 case. You may have to file a chapter 13 case rather than a chapter 7 case, depending on how much income you have. The amount of your income typically determines whether your chapter 13 bankruptcy case will last for 3 or 5 years. During your case, you are required to file a “plan” for repaying some or all of your debts. Under the plan, you pay your disposable monthly income (that is the amount of monthly income available after necessary monthly expenses) to the bankruptcy trustee. The trustee in turn uses the money to pay certain administrative expenses and your creditors’ claims based on the terms of your plan. Among other benefits, a chapter 13 case allows you to cure arrearages on real estate and vehicles. In our experience, most assets are exempt and therefore not subject to being sold.