Chapter 13 Basics

Sometimes individuals find themselves overwhelmed with a large pile of personal debt. Perhaps credit card use got out of hand and you fell behind on payments, or maybe someone in your family lost their job or is burdened by costly medical bills. Whatever the reason, you should know that there are options to help you resolve your debt. One of these is Chapter 13 bankruptcy, a wage earner’s plan to pay back debts over time.

To qualify for Chapter 13, you must first and foremost have a regular income with which you can afford to pay off your debts over time. If you are approved to file, you will be required to draft a repayment plan to pay back your creditors. Your repayment plan only needs approval from the court, not from the creditors themselves. Typically under Chapter 13 a debtor ends up paying back only a percentage of the debt that he or she originally owed.

There are many things to consider when drafting a repayment plan, such as how much disposable income you have, how frequently you can make payments, and how much you can afford to pay for each payment period. These factors will determine how long it will take you to resolve your debts. Repayment plans are usually completed within 3 to 5 years. Filing for Chapter 13 and gradually paying back your debts will require perseverance and restraint, but when the process is complete you will be free from the oppressive debt that previously controlled your life.

Contact Us

The decision to file for bankruptcy is not an easy one. If you are considering filing for bankruptcy under Chapter 13, don’t hesitate to contact the experienced New Orleans bankruptcy lawyers of Kervin & Young, LLC today at 504-599-5906.