How Does Chapter 13 Debt Repayment Work?

Straight Answers and Clear Guidance From an Orlando Chapter 13 Lawyer

Chapter 13 bankruptcy — sometimes called “wage earner” bankruptcy — is not well understood by the general public. In fact, many people conclude that Chapter 13 cannot work for them based on the false assumption that they will have to repay all debts and the only benefit is having more time to do so.

In reality, a well-considered and well-prepared Chapter 13 filing typically eliminates a very significant percentage of the filer’s unsecured debts — credit card balances, medical bills and certain others. For many people with dependable income who are facing foreclosure, saddled with unmanageable second mortgages and dealing with other debt problems, Chapter 13 is the best way to get back on track.

The Truth About Orlando Bankruptcy and Chapter 13 Debt Repayment

You may be considering Chapter 13 bankruptcy because your income makes it difficult or impossible for you to qualify for Chapter 7. This may also be the right solution if your goal is to avoid foreclosure and stay in your home. It is important to understand that:

  • Chapter 13 debt repayment plans must be submitted for approval by a bankruptcy trustee, and you will be required to make monthly payments for the duration of the plan.
  • Payments are calculated based on your disposable income after necessary, declared living expenses — not by dividing everything you currently owe by the number of months in your plan.
  • At the Price Law Firm, our attorneys will recommend Chapter 13 only if it addresses your needs effectively and is workable for you. We are resourceful in structuring plans with the lowest payments possible under the law.

Chapter 7 “debt liquidation” bankruptcy generally cannot directly address or resolve mortgage problems — although those who qualify sometimes find that eliminating other debts gives them the flexibility needed to make mortgage payments. If our analysis indicates that Chapter 13 is the best option available to you, we will walk you through all the steps and help you make an informed, confident decision about filing.

Explore Legal Options in a Free, No-Risk Consultation at Our Firm

If you have questions about foreclosure defense, bankruptcy or other debt relief issues in central Florida, we invite you to call us today at 407-834-0090.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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