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Chapter 13 Bankruptcy

Chapter 13 bankruptcy enables certain individuals with regular income to develop a plan to repay all or part of their debts. It is also known as a wage earner's or debt consolidation plan.

Under this Chapter, debtors propose a repayment plan to make installments to creditors over three to five years, or longer if approved by the court.During this time the law forbids creditors from starting or continuing collection efforts.

Like other Chapters under the Federal Bankruptcy Law, there are certain requirements for filing Chapter 13 and Warner Robins, GA, bankruptcy attorney Lynn Hamilton Johnson can analyze your situation to see if you qualify.

Chapter 13 eligibility is generally based on how much you owe as well as how much money you make. To file Chapter 13, you cannot have more than $1,010,650 in secured debt or more than $336,900 in unsecured debt. If you don't make enough money to repay your debts, you will have to file Chapter 7 instead and possibly give up some of your property.

Chapter 13 offers a number of advantages over liquidation under Chapter 7. Perhaps most significantly, Chapter 13 offers an opportunity to save your home from foreclosure. By filing under this Chapter, you can stop foreclosure proceedings and may cure delinquent mortgage payments over time. You must still make all mortgage payments that come due during the Chapter 13 plan on time.

Another advantage of Chapter 13 is that it allows you to reschedule secured debts (other than a mortgage for your primary residence) and extend them over the life of the Chapter 13 plan. Doing this may lower the payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on consumer debts. This provision may protect co-signers.

Finally, Chapter 13 acts like a consolidation loan under which you make payments to a Chapter 13 trustee who then distributes payments to creditors. You will have no direct contact with your creditors while under Chapter 13 protection.

In most cases you will be expected to pay all of your debts in full to satisfy the requirements of Chapter 13 bankruptcy in Georgia. Your debts will be ranked in order of importance by the court and those rated more important will be given first priority. If you cannot make your monthly payments, the trustee will look at your financial situation and may discharge your case or some of your debt. With a skilled Georgia bankruptcy attorney like Lynn Hamilton Johnson, you can take full advantage of this federal protection.