Chapter 13 Bankruptcy

New York City and Long Island Chapter 13 Bankruptcy Lawyers

If you have a regular income and, after paying off all of your necessary expenses, you have some money left over to pay down your debts, the court will ”restructure” your debts over a 5 year payment plan with little or no interest. The major advantage of this type of bankruptcy is that you will be able to keep all of your assets and will not be forced to liquidate them to satisfy your debts.

Secured Debt

100% of secured debt must be paid off or made current during this payment plan. This refers to debts which are secured by a specific piece of property like a car or home. With regard to these secured debts like a mortgage, the payment plan will give you time to become current and avoid foreclosure. These overdue amounts must be fully paid at the end of the five year payment plan.

Unsecured Debt

Non-secured debts, on the other hand, like hospital bills, credit card bills, lawsuit judgments and payday loans will only be paid back over the payment plan period according to how much you can afford to pay. When you complete the payment plan, most unpaid balances of these debts will be discharged by the bankruptcy-court.

Bankruptcy Plan

Over the course of the three to five year plan, you will make the ongoing agreed-upon payments to your creditors and they may not try to collect more than they are entitled to under your Chapter 13 payment plan. Once you complete all payments during the five year period, the court will grant you a “full discharge” of your outstanding balances.

Bankruptcy Discharge

However, as with Chapter 7 bankruptcy, the discharge will not absolve you of the obligation to pay certain non-secured debts like child or spousal support obligations, most student loans, and many tax obligations.

You may contact our office for a free consultation with an experienced bankruptcy attorney with regard to whether this or another type of bankruptcy-may be appropriate for your situation.