Austin Chapter 13 Bankruptcy Lawyer
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Chapter 13 Debt Repayment Plan
Chapter 13 is known as the wage earner's plan. It allows people to reorganize and consolidate debts by putting together a plan specifying how creditors will be repaid. What property can be kept is really not an issue in this type of bankruptcy. People are allowed to retain all assets but the property exemption laws do factor in what must repaid to the creditors pursuant to the terms of the repayment plan. The repayment terms must meet the requirements under Title 11 of the United States Bankruptcy Code.
Who Files Chapter 13 Bankruptcy?
At the law firm of Hickson Law, PC, our lawyer assists many people in Austin and throughout Texas with filing Chapter 13. In many cases, this type of bankruptcy is used by those who do not qualify for Chapter 7 bankruptcy, or those who want to protect property that may be liquidated in Chapter 7.
How the Chapter 13 Bankruptcy Repayment Plan Works
The amount paid monthly is determined by how much is owed and the type of secured and unsecured debt involved, as well as disposable income, all of which must be put toward the plan. Chapter 13 does not require that creditors be paid in full. A plan may be approved by the court even if it only proposes to repay a few cents on the dollar for certain debts. Most Chapter 13 plans pay only a small percentage to the unsecured creditors.
A person may have thousands of dollars of credit card debt, medical debt and other types of debt that need to be paid each month, but only a few hundred dollars in disposable income. Chapter 13 allows people to pay back only as much as possible with what they have left after expenses, while also:
- Stopping creditor harassment
- Stopping foreclosure
- Stopping repossession and garnishment
- Stopping the IRS
Our firm features a Texas Board of Legal Specialization Certified Consumer bankruptcy lawyer who will work with you personally to determine whether Chapter 13 makes sense in your case.