Filing Chapter 13 Bankruptcy

Chapter 13 Bankruptcy Utah

There are many types of bankruptcy options for people who find themselves in overwhelming debt.

Definition Ch 13

A Chapter 13 Bankruptcy can help you prevent a house foreclosure and make up missed car or mortgage payments and more.  All the debtor needs to do is propose a 3 to 5 year repayment plan. The plan must show how you will pay off all or part of the debt from your future income. Debtors can only file a Chapter 13 Bankruptcy if they have a regular source of income and sufficient disposable income.

Chapter 13 Costs & Payment Plan

Your disposable income and assets or property that is exempt or partially exempt will determine the amount to be repaid. Other things such as secured debts, late house payments, tax liens and car payments also determine how much you pay each month. The total amount that you repay should at least be as much as you would have paid creditors had you filed a Chapter 7 Bankruptcy. You will need to stick to the terms of repayment agreement for all your dischargeable debt to be released at the end of the plan.

Filing Chapter 13 Bankruptcy

Debtors that want to keep their house or car or other secured assets with enough equity can file a Chapter 13. A Chapter 13 is reorganization while a Chapter 7 is liquidation. You can file a Chapter 13 bankruptcy for the following reasons:

  • When you want to stop tax levies or garnishment to allow you to repay taxes interest free for 3-5 years
  • You earn high income and have not passed the Chapter 7 means test
  • You received a discharge in a Chapter 7 case in the last 8 years
  • You have not filed a Chapter 7 or Chapter 13 in the past four years

With a Chapter 13 bankruptcy you can make up all your overdue payments overtime. It allows you to reinstate the original agreement. If you want to eliminate your entire heavy debt burden without paying any of it, a Chapter 7 bankruptcy is a better option. A Chapter 13 is mainly for people who have valuable and non-exempt property, which they want to keep.

Chapter 13 Bankruptcy Eligibility

There are a number of requirements for you to be eligible for a Chapter 13 bankruptcy.  They include:

  • Your secured and unsecured debts should not exceed certain amounts.
  • You must prove to the court that you can afford to meet both your monthly household obligations and pay into the repayment plan
  • You must have received credit counseling within 180 days before filing
  • You must have not had a prior bankruptcy petition dismissed  because you failed to appear in court or failed to comply to the court’s orders within the preceding 180 days

A company or business cannot file a Chapter 13 bankruptcy, only an individual can do this.  You need to consult an experienced attorney that can give review your case and help you determine what debt relief option is appropriate for you.