Chapter 13 Bankruptcy Lawyer in Aurora, CO
Serving Clients Throughout Denver & Adams County
Chapter 13 bankruptcy, known as the wage earner’s plan, is a form of bankruptcy that allows individuals who have a steady and reliable source of income to create a 3-5-year repayment plan to pay back all of their secured debt and, in most cases, a portion of their unsecured debt. The remaining balances of your unsecured debt are discharged at the end of the payment plan. You may only file for Chapter 13 if your debts do not exceed certain dollar amounts. If your level of debt is too high, you may benefit from Chapter 11 instead.
At Consumer Law Pro, we can assess your eligibility for Chapter 13, determine whether it is the best solution for your situation, and walk you through the entire process. Since 2009, our firm has handled more than 2,000 bankruptcy filings of all types and sizes. We are a firm that is dedicated to this area of law, and we pride ourselves on providing service that is both professional and personable. You can count on direct access to our attorney every step of the way.
How Does Chapter 13 Bankruptcy Work?
If you file Chapter 13, you will not have to worry about liquidation of your assets, as you would with Chapter 7. Instead, you will submit a three- or five-year reorganization plan to the court for approval. The major benefit of a repayment plan is that it allows you to make smaller, more manageable payments while protecting your secured assets from repossession or foreclosure. At the end of the plan, the court will most likely discharge any remaining unsecured debt.
Some debt, however, cannot be forgiven through bankruptcy. This includes child support or alimony arrears, criminal fines such as DUI penalties and restitution, student loans, back taxes, personal injury damages, and certain government fees or penalties.
While Chapter 13 may not discharge all your debt, it does offer a substantial benefit: rescuing your home from foreclosure. You can typically keep your home through Chapter 13 bankruptcy by making up mortgage arrears while staying current with mortgage payments throughout the span of your repayment plan. You will be required to operate under the supervision of a court trustee, however, and they will oversee the collection and distribution of your payments to your creditors.
Steps to Complete a Successful Chapter 13
If you wish to file Chapter 13, you must provide documentation of your income from all sources, including:
- Child support
- Spousal support
- Social Security
- Workers’ Compensation
- Disability benefits
- Wages (from an employer or your sole proprietorship)
To develop a repayment plan, we will determine the amount of disposable income available to repay debts by completing a set of means test forms. The amount of income that remains after subtracting normal living expenses is the maximum amount available to repay debts pursuant to a three- or five-year plan. Essentially, your payment plan depends on your income and expenses, not your level of debt.
If your income is not enough to repay your debts in full over 3-5 years, you are eligible for a partial payment plan (aka “best efforts” plan). Once the plan is completed, the remaining balances are discharged. Only the debts included in the plan, however, will be discharged. If you leave any creditors out of the plan, those debts will remain after the plan is completed.
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