Chapter 13 Bankruptcy

The Congress of the United States of America has legislated that Dart Law is a Debt Relief Agency pursuant to Federal Law. Dart Law helps clients access debt relief under the Federal Bankruptcy Code.

Debt Relief for Colorado Individuals & Businesses

The legal team at the Dart Law has extensive experience representing clients in bankruptcy. Below we provided a discussion about Chapter 13 Bankruptcy.

Chapter 13 Bankruptcy

In a case when a Chapter 7 filing is inappropriate, a debtor might be able to file under Chapter 13. Chapter 13 is essentially a repayment plan that allows the debtor to repay a portion of the debt over a period of time, allowing an individual to restructure his or her debt to keep more assets than could be retained in a Chapter 7. Chapter 13 is akin to a business which files Chapter 11 to restructure its debt, then continues doing business.rae.

What to expect when you file for Chapter 13

Filing: To begin a Chapter 13 case, the debtor files a petition that is very similar to a Chapter 7 petition. However, in addition to the petition, the debtor must file a Chapter 13 plan. The plan is the debtor’s proposal to restructure his or her debt.
Creating a repayment plan: A typical Chapter 13 plan provides that the debtor will use his or her income to pay his living expenses, then make payments to secured creditors for debts the debtor has reaffirmed, such as a home mortgage. The plan also can provide for catching up an arrearage on those debts, so that mortgages and other secured debts can be brought current. The plan then provides that any “extra” income left over will be paid to the trustee, who will pay the unsecured creditors a portion of their debts. Typically, a plan must be in effect for sixty months, and each month the debtor makes a payment to the trustee.

Repaying debt then discharge

The Chapter 13 plan is submitted to the court for approval. If the court approves the plan, and the debtor makes all the monthly payments called for by the plan, the court enters a discharge for any unsecured debt that remains unpaid at the conclusion of the sixty months. If the debtor successfully completes the plan, he or she keeps all assets.

When Chapter 13 Is Preferred Over Chapter 7

Generally, there are three reasons to file a Chapter 13:
First, the debtor may have significant assets that cannot be exempted in a Chapter 7.
Second, the debtor might have too much income to qualify for a Chapter 7 under the Bankruptcy Code.
Third, if the debtor is “upside down” on his or her first mortgage, the debtor can ask the court to dissolve the lien related to a second mortgage.

Is Bankruptcy Right for You?

We know that you probably have a lot of questions about whether you qualify for a certain chapter and which chapter is right for you. You can explore your options with the Colorado bankruptcy lawyer at Dart Law to learn more.

Bankruptcy choices

Chapter 7
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Chapter 11
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Chapter 13
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