Chapter 13 Bankruptcy

In the past, Chapter 13 bankruptcy was primarily utilized by New York residential homeowners (including co-ops and condos) who were in foreclosure to allow them to repay their mortgage arrears as well as all, or a portion of, their unsecured debts under the supervision and protection of the United States Bankruptcy Court.

While foreclosure remains the primary reason to file for Chapter 13 bankruptcy, individuals who may not be homeowners, or homeowners who are current on their mortgage obligations, but have incomes above the median income in New York and may not be eligible to file a petition for Chapter 7 bankruptcy can file a petition for Chapter 13 bankruptcy to effectively deal with their debts.

Chapter 13 bankruptcy is designed for working people with steady incomes who want to pay their debts but are currently overwhelmed with bills, judgments, lawsuits, and other financial issues. Even if you do not own a home, the filing of a Chapter 13 bankruptcy petition can assist you to regain control of your financial situation.

A Chapter 13 bankruptcy plan allows an individual to repay mortgage arrears and some, or all, other their other debts (such as credit cards, medical bills, etc.), over a three to five year period. While a Chapter 13 plan is in effect, creditors cannot either start or continue their collection efforts, and they must accept what the plan pays them. Any individual, or married couple, even if self-employed, can receive Chapter 13 bankruptcy relief if they owe less than $1,039,000.00 in secured debt (i.e. mortgages, car loans, equity loans), and less than $336,000.00 in unsecured debt.

Upon the successful completion of a Chapter 13 repayment plan, the debtor receives a Certificate of Completion and Discharge, which extinguishes all obligations to make further payment toward their unsecured debts, even though these creditors may not have been paid in full. In fact, many people repay their unsecured creditors no more than 10, 20 or 30 percent of the total amount owed. Chapter 13 bankruptcy has also helped to save the homes of thousands of Americans every year.

Contact me, your New York bankruptcy lawyer, today for your free consultation to discuss if Chapter 13 bankruptcy is right for you.

More About Chapter 13 Bankruptcy

Why Chapter 13 Bankruptcy is more effective than Debt Consolidation
Modifying Second Mortgages in Chapter 13 Bankruptcy
Discharging Personal Income Taxes in Chapter 13 Bankruptcy