What is Chapter 13 Bankruptcy: Chapter 13 Bankruptcy Explained

Filing for bankruptcy is a big decision. Before you jump in, it is a good idea to understand Chapter 13 bankruptcy. Once you have Chapter 13 bankruptcy explained to you, you will know if it is what you need to do. Then, you can move forward and hire a bankruptcy lawyer in Glendale, AZ.

The Basics

Once you have Chapter 13 bankruptcy explained to you, you will understand that you will have to make payments for three to five years. Some debts have to be paid off completely, while others only have to be partially paid. Because of that, you need to have a steady income in order to file for Chapter 13 bankruptcy. You also can’t exceed the maximum debts limits in filing a Chapter 13 bankruptcy. Secured debts cannot be more than $1,149,525 and unsecured debts cannot be higher than $383,175 to file Chapter 13. Those limits are periodically adjusted.

What is Chapter 13? The Process

When people ask “What is Chapter 13,” they really mean “How does it work?” It starts with a trip, a call, or a click to a credit counselor. You must use the services of an an agency on the United States Trustee’s approved list. If you do not know how to find an approved credit counselor, your bankruptcy lawyer in Glendale, AZ can help.

Then, you need to create a repayment plan. First, determine your priority debts. These debts must usually be paid in full and include items such as child support and taxes. Then, determine your secured debts, such as your mortgage or car loans. Decide how much you will pay toward those debts through your Chapter 13 plan.  Unsecured debt is last on the list and it is paid based on what is left over after all other claims are paid.  The amount paid on unsecured debt depends on your disposable income which is determined after deducting all necessary expenses from your net income.

Chapter 13 Bankruptcy Explained: The Main Benefit

When people ask “What is Chapter 13,” many are surprised to learn that it is a form of bankruptcy that allows them to keep their property. People get the opportunity to catch up on payments they have missed while retaining their property when they file for this type of bankruptcy. That is a huge benefit.

Now that you’ve had Chapter 13 bankruptcy explained to you, you have a better idea as to whether or not it is a good fit for your situation. If it is, contact a bankruptcy lawyer in Glendale, AZ so you he can get the process started.


This blog is intended as a general discussion of legal issues and not as a statement of fact, legal advice or a legal opinion. No attorney-client relationship is created by this blog. Do not act or rely upon law-related information in this communication without seeking the advice of an attorney licensed to practice in the relevant area.

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