A chapter 13 bankruptcy is utilized most often by consumer debtors who do not qualify for chapter 7 bankruptcy but still need relief from their debts. To qualify for a chapter 7 bankruptcy, a debtor must pass the means test. If the debtor’s income is too high to qualify for a chapter 7 bankruptcy, the debtor may proceed to file under chapter 13. To qualify for chapter 13 bankruptcy protection, the debtor must have regular income and their unsecured debt must not exceed $360,475.00 in total.
Aside from income requirements a debtor may seek to file under chapter 13 for other reasons including:
The process of filing a chapter 13 from the debtor’s perspective is not much different than filing under chapter 13 with the exception of a repayment plan and duration of the bankruptcy case.
From the debtor’s attorney perspective, there is a lot more work involved in a chapter 13 than a chapter 7. The attorney’s fees in a chapter 13 are generally much higher. This office bills a minimum of $3300 for a chapter 13 whereas our fees in a chapter 7 start at $650.00.
|Chapter 7 Bankruptcy||Chapter 13 Bankruptcy|
|Liquidation of assets||In some cases||No|
|Debt Repayment plan||No||Yes|
|Meeting of creditors||Yes||Yes|
|Attorney’s fees||Start at $600.00||Start at $1500.00|
|Bring mortgage current?||No||Yes|
|Remove second mortgage?||No||Yes with exceptions|
|Discharge student loans||No||No|
|Duration until discharge||4 months||3-5 years|
|Cram down auto loans||No||Yes|
|Remove judgment liens?||Yes||Yes|
|Maximum income threshold||Yes||No|
|Maximum debt threshold||No||Yes|
|Chapter 7 Bankruptcy FAQ||Chapter 13 Bankruptcy FAQ|
Filing for chapter 13 bankruptcy is different for everyone. Contact Consumer Law Pro today at (303) 297-7729 to set up your free initial consultation, and get your questions about chapter 13 bankruptcy answered within the context of your unique situation.