*UPDATE*BANKRUPTCY QUESTIONS ANSWERED
*UPDATE* MEDICAL BANKRUPTCY INFORMATION

CHAPTER 7 |  CHAPTER 7 HEARING | CHAPTER 13 | CHAPTER 13 HEARING

Another option, Chapter 13

The second option for an individual debtor is Chapter 13 (debt adjustment) case. In this case, it is possible to discharge all debts, except alimony and child support. It is important to realize you will not have to pay off all your debts; in fact, many, if not most, of the creditors will receive only one cent on a dollar.

A Chapter 13 case may last for as long as sixty months, depending on the amount and type of debt. A Chapter 13 plan can be used to cure late payments on automobiles, child support, houses, taxes, etc. The 13 plan permits the use of a very extensive and flexible set of techniques to solve your financial problems. The basics of the plan are determined as follows: Take your net income and subtract your anticipated expenses, leaving disposable income or plan payment. This payment is then used to pay all of your debts, except future mortgage payments and future vehicle lease payments. In other words, this payment will:

1. Cover any late payments on an automobile, house, etc. that you wish to keep;
2. Pay the Trustee fee, attorneys' fees, past taxes, etc.; and
3. Pay a percentage on the dollar to all other creditors.

NOTE: The Chapter 13 plan payment will be withdrawn directly from your paycheck.
A drawback of the Chapter, 13 is that you may not sell any property or obtain a new debt without first obtaining the Court's permission while the case is still open. After your plan is developed, we can discuss how and when this may be done.