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Chapter 13: Debt Consolidation and Repayment Plan

What is Chapter 13 Bankruptcy?

Chapter 13 is a type of bankruptcy designed for individuals with regular income who would like to pay all or part of their debts in installments over a period of time. Debtors are only eligible for Chapter 13 if their debts do not exceed the specific monetary amounts outlined in the Bankruptcy Code.

What Happens When You File Chapter 13 Bankruptcy?

Under Chapter 13, you must file with the court a plan to repay your creditors a certain percentage of the money that you owe them using your future earnings. The court will allow a repayment period of three to five years, depending on factors such as income, monthly living expenses, and more. The repayment plan will begin immediately, preventing creditors from asking you for money. It will be presented to the court and approved at a confirmation hearing approximately 60 days after the filing.

After completing the payments under your plan, your debts, with a few exceptions, are usually discharged. Those exceptions include:

  • Domestic support obligations
  • Most student loans
  • Certain taxes
  • Most criminal fines and restitution obligations
  • Certain debts which are not properly listed in your bankruptcy papers
  • Certain debts for acts that caused death or personal injury
  • Certain long term secured obligations

Filing Chapter 13 With Assistance From a Bankruptcy Attorney

While filing for bankruptcy can be a complex process, it can be made easier with the assistance of a bankruptcy attorney. Tolar & Tolar is a debt relief agency in Alabama that helps those with significant debt to file bankruptcy and to regain control of their financial situation. We provide free initial consultations, during which we will determine if filing Chapter 13 bankruptcy is the right move for you.

After our initial consultation, we can develop a plan and give you a rough estimate of what you could expect to pay into the courts and how long your repayment period will be. Our team of attorneys will then contact you to schedule a second conference. If you feel that the numbers are feasible, we can proceed with the filing. If you do not feel that Chapter 13 would be workable at the estimated payments, we will be more than happy to explore other options with you. Contact us today to get started!

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