Chapter 13 Reorganization Attorneys

A Chapter 13 is the second most common bankruptcy filed by consumer debtors. It is known as a reorganizational bankruptcy because it allows you to alter the terms of repayment for both secured and unsecured debts. This is accomplished through a Chapter 13 plan which replaces your original contract between yourself and your creditors. You can change the interest rate, amount you pay, and maturity date on secured debts. In many cases you pay a small percentage, if anything, to unsecured creditors.

In a Chapter 13 you can reinstate a mortgage on your home even if your lender has foreclosed on the home and has set a sale date. You can also pay off a car even after it has been repossessed. You can take care of your tax liability as well as back child support and alimony.

There are several misconceptions associated with Chapter 13 Bankruptcies such as:

• I HAVE TO REPAY ALL MY UNSECURED DEBT IN A CHAPTER 13
  • FALSE: In practice the vast majority of Chapter 13 Debtors pay very little to unsecured creditors. Anything not paid during the 13 is discharged at the end of the plan term.
• I WOULD NOT BE ABLE TO AFFORD A CHAPTER 13 BANKRUPTCY
  • FALSE: More often than not your payment in a Chapter 13 is less than what you have been paying your creditors on a monthly basis.
• I WILL NEVER BE ABLE TO GET CREDIT AGAIN.
  • FALSE: The availability of credit has more to do with your current credit worthiness than a past bankruptcy. While it is true that a bankruptcy will temporarily result in higher interest rates and denials of credit, as you move forward reestablishing a good credit history the interest rates will drop and you will find it easier to obtain credit.
  • Many of our clients qualify for vehicle loans just after filing when they could not have qualified otherwise.