Chapter 13 has some really fabulous uses. I discuss the technicalities at "CHAPTER 13-BANKRUPTCY" Here I am just discussing it generally, and it may be best to start at the other page and then come back here.
Chapter 13 is a personal reorganization that works very cost effectively for those who have unsecured debt of less than $336,900 and secured debt of less than $1,010,000. See "LIABILITIES" for a discussion of the differences in this type of debt.
Chapter 13 can save your home if you’ve fallen behind on mortgage payments. It can strip off a completely unsecured second mortgage. It can stop interest and penalties on otherwise nondischargeable tax debt.
The choice of whether to reorganize under Chapter 13 versus liquidating under Chapter 7 is one that should be extensively explored with your attorney when your situation has advantages and disadvantages depending on which chapter you file. It is not always a simple choice and needs to be extensively considered.
Many times a Chapter 13 will give a lot more debt relief than a Chapter 7, usually when there is a completely unsecured second or even second and third mortgage.
Sometimes if nondischargeable tax debt is in the mix and that is what will take up most of your disposable income during the repayment term then you may also save some money by filing a Chapter 13.
Other times you simply have no choice but to file a Chapter 13 if you make too much money to pass the Chapter 7 Means Test, which is discussed in more detail at "INCOME". Yet if it reduces your monthly payments and allows the payoff of the debts in 3 to 5 years instead of being caught perpetually on the minimum payment treadmill, then it may be a better option than not filing any chapter of bankruptcy.
Not every bankruptcy attorney practices Chapter 13 but we do, and we’ve got it down very well. We have an excellent rate of plan confirmations, far greater than the court’s average. That is for two main reasons. First, I am selective about the cases I take. It makes no sense to start a project that isn’t likely to succeed, and so I carefully examine your case and help you determine your chances of succeeding. Second, I am extremely diligent in executing on our plan. We work in partnership to make sure you come out of your chapter 13 with the coveted discharge order. That requires good collaboration and some work, more on my side than yours, but we both need to work together to achieve an optimal outcome in Chapter 13.
