Chapter 13 bankruptcy is often called the "wage earner's" plan. In most cases, individuals who file Chapter 13 do not qualify for Chapter 7 bankruptcy because they earned too much income to pass the Means Test. To qualify for Chapter 13, you must have current regular income and unsecured debts (i.e. credit cards) must less than $360,475 and secured debts (i.e. car loans, mortgages) must be less than $1,081,400, to date. Please keep in mind that these dollar amounts are subject to change. Yet, these individuals are afforded the right to substantially modify and consolidate their all debts that they are able to repay. Chapter 13 bankruptcy affords individuals the protection of the Automatic Stay that halts most if not all creditor actions in attempting to collect debt.
Chapter 13 plans require either a three (3) or five (5) year plan whereby you pay off your debts. Although the debt repayment plans cannot eliminate certain debts such as mortgage loans, student loans, auto loans or recent tax debts, it will eliminate or substantially reduce many other debts. In most cases, Chapter 13 bankruptcy filers will most likely be able to eliminate or substantially reduce unsecured debts; such as, (1) credit card, (2) medical bills, (3) personals loans, (4) gambling debts, and (5) pay day loans. At Debt Solutions, we will help draft an affordable and feasible plan whereby you keep your most important assets. This includes working with banks and other lenders to negotiate favorable terms, working to eliminate any late payments, and allowing you the opportunity to keep your house and car.
At the conclusion of the debt repayment plan, most debts will be discharged and individuals will be afforded a fresh start.