Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a reorganization plan . pr a wage-earner plan. It’s a way for those facing bankruptcy, while holding a stable job, to repay their debts in a single, monthly payment that works with their budget. Chapter 13 repayment plans run 3 – 5 years with most debts being completely discharged at the end of the plan.
Unlike Chapter 7, this is not an immediate discharge of unsecured debt. However, Chapter 13 provides more options for those wanting to keep personal property – like homes and cars. Chapter 13 also stops wage garnishment and extends coverage to any co-debtor.
Automatic Stay Protection
Chapter 13 bankruptcy also provides immediate Automatic Stay protection. Automatic Stay stops foreclosure proceedings, stops creditor harassment, and stops collections. In Chapter 13 automatic stay protection lasts the length of the repayment plan.
Exceptions
Most debts will have a percentage of what is actually owed paid by the end of the plan period. However, there are some “Priority claims” that have to be paid in full no matter what is discharged. Priority claims include: student loans, recent tax debts, child support, alimony, and any debt incurred through DUI or intentional acts.
For those who feel morally obliged to pay their debts no matter what, or don’t qualify for Chapter 7, Chapter 13 may be your option for “doing the right thing”. Qualified Maryland bankruptcy attorneys work with you every step of the way in repaying your debts.
