How Chapter 13 bankruptcy can help you

by Julio Cesar Marrero on Jul. 11, 2018

Bankruptcy & Debt Bankruptcy 

Summary: Chapter 13 Bankruptcy can help you get the fresh start you need to get your finances back on track.

While most people understandably believe their finances are secure enough to weather any problems that life may throw their way, this doesn’t always prove to be the case. Indeed, anything from the sudden loss of a job or a divorce filing to the onset of a serious injury or illness can rapidly drain bank accounts, increase reliance on credit cards and wreak financial havoc.

As distressing as it can be to see bills going unpaid despite your best efforts and avoiding the telephone for fear it might be another creditor calling, it’s important to know that you are not without options. In fact, those who find themselves in these scenarios may consider the fresh start offered by Chapter 13 bankruptcy.


In general, Chapter 13 bankruptcy enables a person with a regular income to pay off all or a portion of their debts via regular installment payments over a period not to exceed five years. Specifically, if the person’s monthly income is found to be less than the applicable state median, their repayment plan will last for three years and, if their income is above the applicable state median, the plan will last for five years.

These regular installment payments will be made to a bankruptcy trustee who distributes them among the person’s creditors. Once the repayment plan is complete, the person will be entitled to a discharge, meaning a release from all remaining debts covered by the plan.

It’s important to understand, however, that this discharge does not cover things like alimony, child support, liability for judgments in personal injury or wrongful death cases, certain tax debts, restitution or criminal fines.

We’ll continue this discussion in our next post, examining the eligibility requirements for Chapter 13 and its other advantages.

If you would like to learn more about Chapter 13 or other debt relief options, consider speaking with an experienced legal professional.


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