Delaware Bankruptcy Attorney - Chapter 13 Bankruptcy
Stop Foreclosure - Save Your Home
A Chapter 13 Bankruptcy is much different in nature than a Chapter 7 Bankruptcy. A Chapter 13 bankruptcy has a repayment plan by which you repay creditors. There are distinct advantages to filing a Chapter 13 Bankruptcy. A Chapter 13 Plan can allow you to catch up on arrears to secured creditors, pay off vehicles with a reduced interest rate, and repay back taxes and other creditors. Many consumer debtors use the Chapter 13 process to save their homes from foreclosure. If you have the ability, however, you must also repay unsecured creditors rather than having those debts completely discharged in a Chapter 7 Bankruptcy. Further, a Chapter 13 Plan will last between 36 - 60 months in duration. A Chapter 13 debtor may not default on plan payments or their case may be dismissed without being afforded a discharge.
Under applicable federal law, a consumer debtor may not file a Chapter 13 Bankruptcy if his/her secured debt exceeds $1,010,650.00 and/or unsecured debt exceeds $336,900.00. Most consumer debtors do not exceed these debt ceilings.
Generally speaking, you may qualify for a Chapter 13 Bankruptcy if you make enough income to pay long term secured debt (for example a mortgage), a Chapter 13 Plan, and necessary expenses (food, insurance, etc.).
Your Chapter 13 Plan payment will be based upon the amount of your indebtedness, your income and ability to repay debts, the value of your assets and the ability to exempt any equity in those assets under applicable Delaware law.
Filing a Chapter 13 Bankruptcy
A Chapter 13 Bankruptcy is a very difficult process to go through alone. In fact, the vast majority of Chapter 13 cases in Delaware where a debtor represents him/herself are dismissed for failure to comply with the Delaware Bankruptcy Court's rules and requirements. An experienced Delaware bankruptcy attorney can increase the chances of a successful bankruptcy discharge.
As previously stated, you will be required to repay some or all of your creditors in a Chapter 13 Plan. Also, some of your attorney's fees and costs associated with filing may be paid through your Chapter 13 Plan. The percentage of repayment to unsecured creditors will be based on your income and ability to pay. Most Chapter 13 Plans take 5 years to complete, but the minimum duration for a proposed plan is 3 years. The plan payments must be made to your Chapter 13 trustee every month without fail. The trustee then pays the funds collected through your plan to creditors in a certain priority beginning with priority creditors and ending with unsecured creditors.
Like a Chapter 7 Bankruptcy, you will have a court hearing with your trustee. The trustee will examine your petition and proposed plan to ensure accuracy and your ability to repay. There will also be a Chapter 13 Plan Confirmation Hearing. These hearings are to ensure that there are no objections to you Chapter 13 Plan and/or to see if any changes need to be made. Upon confirmation, if you are employed, you are required to submit a wage order to the Bankruptcy Court so that your Chapter 13 Plan payments are deducted from your regular pay checks.
Upon completing your Chapter 13 Plan, you will receive a Chapter 13 discharge. This will discharge all of your indebtedness except for those secured debts you must repay post-discharge.