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What Is Chapter 13 Bankruptcy?

For many people with significant debt problems, Chapter 13 bankruptcy provides a solution. At Pearman Law Firm, P.C., our lawyers file Chapter 13 bankruptcy for clients in Wheat Ridge, Lakewood, Arvada and other communities in the Denver metropolitan area of Colorado.

Debt Repayment Plan Attorneys In Denver

Chapter 13 bankruptcy is a debt repayment plan. When you file for Chapter 13 bankruptcy, you create a plan to pay off a percentage of your debts over a three- to five-year period. It is similar to Chapter 11 bankruptcy, which many businesses file. However, Chapter 13 bankruptcy is intended for individuals and has a cap on the amount of debt that the individual can have.

Arrearages on secured debts (those backed by property such as real estate) must be repaid in full, while unsecured debts do not. In fact, you may only be required to pay a small percentage of unsecured debts such as credit card bills, lawsuit judgments, payday loans and hospital bills. At the end of your three- to five-year repayment plan, you will receive a discharge similar to that in a Chapter 7 bankruptcy.

A Chapter 13 bankruptcy plan is a form of debt consolidation, as you will make one payment to the bankruptcy trustee, who will pay your creditors.

Why Should I File Chapter 13 Bankruptcy?

There are many reasons why you may choose to file Chapter 13 bankruptcy instead of Chapter 7 bankruptcy. Here are some examples:

  • You may earn too much money to be eligible for Chapter 7 bankruptcy.
  • Chapter 13 bankruptcy gives you up to five years to catch up on past-due mortgage payments, taxes and child support.
  • You may be able to strip off second mortgages and third mortgages from your home when you file Chapter 13 bankruptcy if the value of the home is less than the first mortgage.

For More Information About Chapter 13 Bankruptcy

To talk to our Arvada Chapter 13 bankruptcy attorneys, call 720-259-9528 for a free initial phone consultation.