Chapter 13 Bankruptcy Attorneys in Ridley Park, Pennsylvania

Chapter 13 bankruptcy, also known as a reorganization plan, allows individuals with a regular income to develop a feasible repayment plan to address their debts. Under Chapter 13, you can keep your assets while spreading out your debts over a three-to-five-year period.

This plan involves using your disposable income to pay off creditors in a structured manner, making it suitable for those who want to avoid liquidation and foreclosure. 

Understanding Chapter 13 bankruptcy can be challenging, but the experienced attorneys at Adams Kearney Law are here to guide you every step of the way.

Our attorneys will help you assess your financial situation, develop a feasible repayment plan, represent you throughout the process, and advocate for the best possible outcome. 

What Chapter 13 Does Do 

Chapter 13 bankruptcy helps you consolidate your debts into a single monthly payment tailored to your financial situation. This repayment plan considers your income, expenses, and debt obligations.  

One significant advantage of Chapter 13 is that it can stop foreclosure proceedings and allow you to catch up on missed mortgage payments over time. Additionally, it can reschedule secured debts (excluding a mortgage for your primary residence) and extend them over the life of the plan, potentially lowering your monthly payments.

Filing for Chapter 13 also triggers an “automatic stay,” preventing creditors from initiating or continuing collection activities, giving you a much-needed financial respite. 

By following the court-approved repayment plan, you can protect co-signers from collections efforts and discharge some remaining unsecured debts at the end of the repayment period. Through this process, you maintain possession of your assets, such as your home, car, and other valuable properties, while working towards financial stability. 

What Chapter 13 Doesn’t Do 

While Chapter 13 bankruptcy offers numerous benefits, it also has its limitations.

Unlike Chapter 7, Chapter 13 does not immediately discharge your debts but requires you to follow a repayment plan. Additionally, certain obligations cannot be eliminated, including alimony, child support, most student loans, certain taxes, and debts arising from fraudulent activities.

Furthermore, if you fail to meet the terms of the repayment plan, your bankruptcy protections may be lifted, and creditors could resume collection efforts. 

The Repayment Plan 

The repayment plan is integral to the Chapter 13 bankruptcy process. The duration typically spans between three to five years, depending largely on your income level. The plan must be approved by the bankruptcy court and should account for your ability to pay.  

Priority debts, such as taxes and child support, will be paid in full through the repayment plan, while unsecured debts, like credit card bills and medical expenses, may receive partial payment based on your disposable income.

The remainder of eligible debts may be discharged upon completion of the plan, provided you adhere to all requirements. 

Eligibility for Chapter 13

Eligibility for Chapter 13 requires that you have a regular income and your debts fall within specific limits. As of April 1, 2022, unsecured debts must be less than $465,275, and secured debts must be less than $1,395,875. If your debts exceed these amounts, you may need to consider other bankruptcy options.

Furthermore, you must be current on your tax filings to qualify, and you must provide proof of income and financial records to the court. 

Chapter 13 Bankruptcy FAQs

How long will Chapter 13 remain on my credit report? 

Chapter 13 bankruptcy will remain on your credit report for seven years from the date of filing. This is shorter than the ten years associated with Chapter 7 bankruptcy.  

Can I apply for new credit or loans during Chapter 13? 

Applying for new credit or loans while under Chapter 13 can be challenging and typically requires obtaining the bankruptcy court's approval. Any significant financial decisions or changes typically need to be reported and may be subject to court approval. 

What happens if I miss a payment under the repayment plan? 

Missing a payment under your repayment plan can jeopardize your bankruptcy case. It is crucial to communicate with your bankruptcy attorney and the trustee to address any financial difficulties immediately. In some cases, the court may allow modifications to the plan based on your changed circumstances. 

Can I refinance my mortgage under Chapter 13? 

Refinancing your mortgage during Chapter 13 is possible, but you will need approval from the bankruptcy court. The court will evaluate if the refinancing is in your best interest and won't hinder the completion of your repayment plan. 

Are there limits to the number of times I can file for Chapter 13? 

There are no strict limits to the number of times you can file for Chapter 13 bankruptcy, but there are restrictions on how soon you can receive a discharge after a previous bankruptcy. You must wait at least two years after receiving a Chapter 13 discharge before filing another Chapter 13, and four years if the previous filing was Chapter 7.  

Can I keep my tax refund while on Chapter 13? 

Your tax refunds may be considered as part of your disposable income and might need to be paid into your repayment plan. However, you can discuss specific circumstances with your attorney, who may request the court to allow you to keep your tax refund for necessary expenses. 

Will I have to go to court for Chapter 13? 

Yes, you will need to appear in court at least once for the confirmation hearing of your repayment plan. Additionally, you may need to attend a meeting of creditors where your Chapter 13 plan will be reviewed.