Chapter 13 reorganization is a way for an individual or a married couple to consolidate and usually substantially reduce their debts by making payments over time pursuant to a court-approved plan. Chapter 13 can:
- stop a foreclosure and save your home;
- protect your vehicles from repossession;
- address tax liens and stop wage garnishments;
- protect you from outstanding delinquencies in child support or alimony (the arrears will be paid back in full over time);
- stop and eliminate judgments; and
- substantially reduce interest rates and overall debt balances.
In Chapter 13 we prepare a payment plan together that provides for you to make monthly payments to an officer of the court called a Chapter 13 Trustee. The trustee then distributes payments to your individual creditors from the funds you pay in each month based on the terms of your plan of reorganization.
The purpose of Chapter 13 is to protect and retain your property, reduce as much debt as possible and create a payment plan that you can afford. The amount of your payment is not simply determined by your income or a percentage of the debt you owe, but by determining an individual payment plan that is both feasible for your household and allows for payment of debts and protection of property in a manner that will elicit court approval. There is no chart or average payment. We will work together to put together a plan that allows your household a means to protect your assets and make a payment you can afford.
Please remember that this is a very basic description of bankruptcy law and not legal advice. We can discuss your situation in detail during a free, confidential consultation with an attorney who will explain how bankruptcy law fits your specific situation. We are a debt relief agency.