Chapter 13 is often referred to as the "repayment plan" or the "debt consolidation" bankruptcy. Every individual's financial situation (income, assets, and debts ) is different, and therefore, every Chapter 13 differs, whether it be the repayment structure, complexity, or end result.
Essentially, Chapter 13 allows a person with a regular monthly income to create a repayment plan that can last anywhere from a few months to five years; most plans are typically structured to pay off in three to five years. Since bankruptcy allows the client to catch up on past due amounts, it can stop all sorts of creditor collection actions like foreclosures, evictions, repossessions, wage garnishments, child support delinquency actions, tax lien collections, etc. By filing under Chapter 13, clients remove the burden of stress and anxiety that resulted from their fear of losing assets. This relief gives the client some breathing room.
The monthly payment is the most important aspect of the Chapter 13 because it allows the entire repayment plan to be carried out; this payment is solely based on the debts the client proposes to pay within the case. One of the greatest benefits provided by Chapter 13 is that it allows clients to reduce interest rates, and under some circumstances, reduce vehicle loans or remove second mortgages entirely. Some clients are required to pay some of their unsecured debts (interest free), while others are required to pay all of their unsecured debts (interest free). However, the vast majority of clients do not pay any of their unsecured debts. at all. At the end of the repayment plan, any remaining debts are eliminated. For more information about the amount you could potentially pay, review our "Chapter 13: Payment Estimator" below.
Essentially, the chapter 13 plan (“Plan”) is a detailed proposal that outlines the client’s intention of getting caught up on past-due payments. The plan contains a few important provisions:
All bankruptcy districts have adopted either the national chapter 13 plan, or a form plan for use in all Chapter 13 cases.
Below are the year-to-date figures for bankruptcies filed in the Northern District of Georgia for the last four years.
Year-to-date: 2019
Year-to-date: 2020
Year-to-date: 2021
Year-to-date: 2022
Must have regular monthly income to sustain the monthly payment.
Secured debt must be less than $1,149.426.
Unsecured debt must be less than $383,175.00.
Must not have a prior 109(g) dismissal, within the last 180 days, preventing you from filing.
A Standing Chapter 13 Trustee is assigned to every Chapter 13 case. You will have an opportunity to meet the trustee at the 341(a) meeting. The Chapter 13 trustee is responsible for evaluating the case, ensuring the client compliance with applicable laws, and disbursing payments to creditors.The Chapter 13 trustee is paid a percentage of the total debt, which was proposed to paid in the case.
The confirmation hearing is the most important hearing for a Chapter 13. At this hearing, the court will either approve or deny the proposed repayment plan. Weeks prior to this hearing, clients collaborate with their attorneys to resolve any issues the Chapter 13 trustee, or creditors, may have relayed to the client after the 341(a) meeting. If all issues are resolved and the client has demonstrated that they have enough income to timely pay for everything, the court will approve case. However, a case's initial success is largely based on how well the client and attorney cooperate during this part of the process.
Chapter 13 is an extremely complex and complicated process, please give us a call if you are considering filing.
$338.00 – Includes your filing fee and credit counseling course. These costs must be paid prior to filling.
In Chapter 13 payments are paid through your monthly, bankruptcy payments. No payments will be remitted towards attorney's fees until your case is approved by the Court. The attorney fee for a Chapter 13 bankruptcy is $4,000.00; however, there may be an additional $250.00 each, for unordinary complications.
Although our attorney-client contract reserves the right to charge additional fees above what is customarily charged for routine cases, we do not file fee applications, unless the case becomes overwhelming complex, or complicated. We will always consult with you first before seeking additional compensation.
Since the attorney's fees include expenses for multiple events that you will likely encounter during the 36 - 60 months that you are in your case. If those select events do not occur, we remit any reimbursements to your Chapter 13 trustee to help you pay off your case quicker.
Can eliminate second mortgages and tax debts
Attorney's fees are paid through the case.
Prevents foreclosures and repossessions.
No one loses property - exempt or non-exempt
Reduce interest rates and vehicle loan amounts
Repay Child Support Arrears
Restore your driver's license
Manage all debts with one monthly payment
Last 3-5 years.
Debts are only eliminate at the end of the 3-5 years.
More expensive than the Chapter 7.
Cannot incur any new debt without court approval.
