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Chapter 13

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Higher income debtors who cannot pass the Chapter 7 Means Test will want to consider filing for Chapter 13 bankruptcy. The major difference between Chapter 7 and Chapter 13 bankruptcy is that in Chapter 13 debtors submit a plan to repay their debts, either in part or in full, over time, usually 36-60 months. Due to the requirement of a monthly payment, Chapter 13 bankruptcy works best for people who have steady income. The amount of the monthly payment in Chapter 13 involves a number of factors which our experienced bankruptcy lawyers would be happy to discuss with you.

Chapter 13 offers certain advantages over Chapter 7, including not having your non-exempt assets seized and sold by a trustee. Chapter 13 also allows you to keep important assets such as your home or car, while letting you catch up on your payments if you have fallen behind.

In addition, certain debts can often be eliminated or substantially reduced in Chapter 13 even if the debts are secured by an asset you would like to keep, such as a home or car. For example second mortgages can often be “stripped off” your home and certain car loans can be “crammed down” in Chapter 13, which often results in very significant reductions in overall indebtedness. If you are “upside down” in an asset you would like to keep, you should give us a call to discuss the options available to you under Chapter 13.

In order to qualify for Chapter 13 you cannot have more than $383,175 in unsecured debt, or more than $1,149,525 in secured debt.