Chapter 13 is reorganization or consolidation bankruptcy. In Chapter 13, you make a monthly payment (possibly as little as 1% of unsecured, non priority debts) for 3 to 5 years and then you receive the discharge. If you are over median income and do not qualify for Chapter 7, Chapter 13 is an option.
Chapter 13 is a bankruptcy option if you are not eligible for Chapter 7 due to being above median income and not passing the means test, if you own a house with non-exempt equity, have made certain types of transfers, or have other prior, current, or future non-exempt assets that would be sold or seized in Chapter 7, or you had a Chapter 7 within the last 8 years, or for many other reasons and objectives.
Some forms of relief are only available in Chapter 13, such as post petition HOA debt, priority taxes, unsecured 2nd mortgages, MVA and Central Collection Unit debt, unemployment overpayment, etc. Chapter 13 permits the debtor time to pay priority taxes or child support arrears; allows people to catch up on mortgages; eliminates unsecured second mortgages; crams down vehicle loans, helps with student loans, keeps non-exempt assets, bifurcates liens, strips liens, among other benefits.
Chapter 13 Plans are not mechanical, so the results can be very different depending on which lawyer your choose to assist you against your creditors’ attorneys.
We have very extensive experience and expertise with Chapter 13 cases. Chapter 13 filings require expertise, as there are a lot of complicated rules that change often. The bankruptcy lawyer you hire will litigate and negotiate the terms of the 13 Plan, including the monthly payment amount, against your creditors’ attorneys. Therefore, the attorney you choose can significantly affect your bottom line, and the quality of your attorney makes a difference in your consolidation plan results.