Chapter 13 Bankruptcy

Portland Chapter 13 Bankruptcy Attorneys

What is a Chapter 13 Bankruptcy?

Chapter 13 bankruptcy – also known as reorganization or “wage earners” bankruptcy – requires you to pay your “disposable monthly income” into a Chapter 13 Plan for a period of up to 5 years. Chapter 13 bankruptcy works best for people who have a steady, reliable income. In most cases, the payments made to creditors only amount to a small percentage of what is actually owed. After completion of the Chapter 13 Plan, whatever unpaid debt remains is discharged and creditors are forever barred from seeking repayment.

The Chapter 13 Process

Much of the Chapter 13 process is similar to the Chapter 7 process. However, in addition to filing the Bankruptcy Petition with the court, a Chapter 13 bankruptcy requires you to propose a Payment Plan – commonly referred to simply as “the plan.” The amount of the plan payments is determined by the debtor’s disposable monthly income and non-exempt assets, as well as the amount of secured and priority debts that the debtor intends to pay through the plan. The Chapter 13 trustee has developed a computer program that helps us calculate as closely as possible what your required plan payment may be. At Owens / Pinzelik, P.C. we can help tailor the plan to meet your financial needs.

While a Chapter 7 bankruptcy is usually preferable because it is quicker and less expensive, Chapter 13 bankruptcy can benefit you in the following ways:

  • If you are behind on mortgage payments, a car loan, or face significant tax debt, often you can “catch up” on the payments through the Chapter 13 Plan.
  • If you purchased your car more than 2 ½ years ago, you may only have to pay the amount the car is worth, as opposed to the amount you owe on the car. This is particularly helpful if you are paying off an older car. It makes the car more affordable for you.
  • In some cases, Chapter 13 will allow you to “strip” (get rid of) a second or third mortgage on your residence, leaving you with a significantly smaller monthly mortgage obligation. This provision is not available in every situation. Your ability to strip a lien depends on the current value of your home and the balance of any mortgages.
  • Filing for bankruptcy under Chapter 13 and tailoring a Chapter 13 Plan takes careful preparation and experience. Only an attorney experienced with the complexities of Chapter 13 bankruptcy should advise you whether Chapter 13 is right for you.

Call our Oregon bankruptcy attorneys at 503.224.3100 or contact us online to see if Chapter 13 bankruptcy can help you.

Our initial bankruptcy consultations are FREE. Call now to schedule your free no obligation consultation and find out if our bankruptcy attorneys can help you and your family.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy code. These materials have been prepared and are provided for informational purposes only and are not intended as legal advice.

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