A Chapter 13 Bankruptcy is a reorganization Bankruptcy for individuals.

Some of the benefits of a Chapter 13 Bankruptcy is that debtors who could not qualify for a Chapter 7 Bankruptcy could file a Chapter 13 and still get the benefits of Bankruptcy. In many cases in a Chapter 13 Bankruptcy debtors can get rid of second and third mortgages, get current on mortgages and car loans, pay off their car for what it is worth rather than how much they owe, pay off taxes and they can keep assets that they might have lost if they filed a Chapter 7 Bankruptcy.

These are just a few of the benefits of a Chapter 13 Bankruptcy.

Chapter 13s are often referred to as a "wage earners" Bankruptcy because they are designed for individuals who have sufficient income to repay part or all of their debts. The ability to repay debts is based upon several factors including income.

An individual's income may exceed the median income such that according to the Bankruptcy laws, you do not qualify for a Chapter 7 Bankruptcy, but do for a Chapter 13.

Another factor may be unprotected assets. In Bankruptcy there are exemptions that exempt or protect your assets during Bankruptcy. If an asset cannot be fully exempted, but you want to keep that asset, you are at risk of loosing it in a Chapter 7 Bankruptcy. So in that case a Chapter 13 Bankruptcy might be a better option. The amount that is unexempted is determined to be the amount that through the life of the plan you will pay back to all of your creditors. This amount is distributed according to statute and is distributed fairly evenly amongst your creditors.

The type of debts that you have, and whether or not you are current on loans such as mortgages, will be another factor used to determine if a Chapter 13 Bankruptcy might be the best option.

Your attorney will discuss with you if and why a Chapter 13 might be the better option for you. Your attorney will also help you create a budget and a Chapter 13 plan.

In a Chapter 13 Bankruptcy the attorney will work with the debtor to create a Chapter 13 plan. This plan will designate how each of the different types of debts should be treated. The plan must provide for all of the debtor's (the person filing Bankruptcy) debts and indicate how they will repay part or all of their debts. Generally the plans extend for 3 to 5 years.

In addition to qualifying for a Chapter 13 Bankruptcy based upon your ability to pay a Chapter 13 plan payment, an individual filing for a Chapter 13 Bankruptcy must also be within the debt limits as set forth by the Bankruptcy Code.

As previously mentioned, one of the many benefits of a Chapter 13 Bankruptcy is that it can, in some cases, provide an individual the ability to get current on car or house payments, repay back taxes that are not dischargeable, or possibly get rid of second mortgages.

There are many benefits of filing a Chapter 13 Bankruptcy, and at River City Law and attorney will work directly with you to determine what type of Bankruptcy is the best option for you. We will walk you through each step of Bankruptcy including creating your Chapter 13 plan.

It is important that you consult with an attorney or qualified professional to determine if you are eligible to file for a Chapter 13 Bankruptcy.

Contact us today to discuss your case!