Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a wage-earner plan, or a reorganization plan. It’s a way for those facing bankruptcy, while holding a stable job, to repay their debts in a single payment that works with their budget. Chapter 13 repayment plans run 3 – 5 year with most debts being completely discharged with the completion of the plan.

Unlike Chapter 7, this is not an immediate discharge of debt. However, Chapter 13 provides more options for keeping certain property – like homes and cars. Chapter 13 also stops wage garnishment and extends to cover any co-debtor.

Automatic Stay Protection
Chapter 13 bankruptcy also provides for Automatic Stay protection. Automatic Stay stops foreclosure proceedings, stop creditor harassment, and stops collections. In Chapter 13 this protection lasts the length of the repayment plan.

Exceptions
Though most debts will have only a percentage paid on what is actually owed, there are some “Priority claims” that have to be paid in full no matter what else is discharged. These include: student loans, recent tax debts, child support, alimony, any debt incured through DUI or intentional acts.

Doing the “right thing”.
For those who feel morally obliged to pay their debts no matter what, or don’t qualify for Chapter 7, Chapter 13 may be for you. Qualified Virginia bankruptcy attorneys work with you to determine what kind of payment plan is right for you.