Chapter 13 bankruptcy, also known as a wage earner’s bankruptcy, is an ideal option if you are facing foreclosure of your house and/or repossession of other assets or do not qualify to file for Chapter 7 bankruptcy.
With the help of your experienced bankruptcy attorneys at Berger, Fischoff, Shumer, Wexler & Goodman, LLP, a repayment plan is proposed to the court in order to reorganize your debt. The Chapter 13 plan payments are made to an appointed Trustee who distributes the money to your creditors on a monthly basis. During the period of the plan repayment, you and your property are protected from the creditors as long as you fulfill your obligations via the plan. Through this process, you will remain current on your secured debts (mortgages, car loans, etc.)
The length of the repayment plan typically varies from three to five years, based upon your “disposable income” as well as additional secured and unsecured debt (please visit our bankruptcy FAQ page to learn more about the differences between secured and unsecured debt).
After your payment plan is successfully completed, your mortgage, car loans, and any other secured debt that initially fell behind will be deemed current. In addition, any remaining unsecured debts will be discharged or wiped out.