Part 2—Benefits of Chapter 13
Part 3—How Your Plan Payment is Calculated
Part 4—The Chapter 13 Process

What is Chapter 13 bankruptcy?

Chapter 13 is a form of bankruptcy that is more flexible than traditional bankruptcy. We use it to protect assets, stop foreclosure, manage credit cards, deal with difficult tax debts, or restructure car loans. Because of its flexibility, Chapter 13 is a great tool in more complex cases.

How Chapter 13 Works

Chapter 13 bankruptcy is a monthly payment plan that pays only the portion of your debts that you can afford, with zero interest. Whatever isn’t paid by the end of the Chapter 13 plan is usually wiped out forever.

To determine your monthly payment amount, we figure out your “disposable income.” This is basically your take-home pay minus your living expenses. In many cases, your disposable income is close to what your monthly Chapter 13 payment will be. This amount is then paid to your creditors over a three-to-five-year period. Any remaining debt is wiped out at the end of the bankruptcy.

When should I consider Chapter 13?

• Your income is too high for Chapter 7

• You own a home but you're behind on your mortgage or facing foreclosure

• You're underwater on a second mortgage

• You’re behind on debt payments, but could catch up if you had more time

• You have valuable property that isn’t exempt

Part 2—Benefits of Chapter 13
Part 3—How Your Plan Payment is Calculated
Part 4—The Chapter 13 Process