Chapter 13

What is Chapter 13 bankruptcy?

Individuals can file for Chapter 13 bankruptcy by completing a bankruptcy petition and filing it with the Bankruptcy Court. This process also requires the filing of a monthly payment plan. Once you file this petition, an automatic stay goes into place. This stops creditors from calling you, garnishing wages, or otherwise pursuing you for funds you owe. When the case is processed, you will receive a discharge order, which will release you from remaining debt you owe. 

Can you keep your assets?

Under federal and state law, specific exemptions provide individuals with protection for their assets. Delaware law is generous in what it allows you to keep even through bankruptcy. These are some of the exemptions you may qualify for: 

  • Homes: Up to $125,000 worth of equity (un-mortgaged value)
  • Vehicles: Up to $15,000 worth of equity per person filing
  • Pensions: Almost all pension funds are protected from creditors
  • Personal exemptions: Up to $25,000 per person filing in personal property (bank accounts, household goods, furnishings, and jewelry) 

Additionally, Chapter 13 bankruptcy provides less risk for many people who have assets above this level. Talk to us about your assets, as you can often keep them.

Who can file and qualify for Chapter 13 bankruptcy?

Many people can file for bankruptcy, including individuals and married couples, including those who are self-employed. You may continue to operate your business under this type of bankruptcy. Incorporated businesses cannot file under this type of bankruptcy. 

When you file your petition, you will likely receive acceptance. If you do not qualify such as for having filed Chapter 7 or 13 previously too recently or because of other requirements, we'll help you to know that right away, usually before you petition the court. 

What is the difference between Chapter 7 and 13?

Chapter 13 requires ongoing repayments towards your debt for a period of 3 to 5 years after filing. With this comes asset protection. You may also be able to reorganize your mortgage in the hopes of avoiding foreclosure. You may be able to get your car loan payment reduced or not pay penalties on your back taxes. You may even be able to strip a second mortgage from your home. 

You may get rid of most of your debts

Like Chapter 7 bankruptcy, you may need to repay some debts, including student loans, back taxes, and child support obligations. You may not have to fully repair other debts, such as credit card debt, payday loans, and other unsecured debt. Let our team help you to see how well this type of bankruptcy can meet your needs. 

Disclaimer

The Law Offices of Holfeld and Becker is a debt relief law firm as defined by 11 U.S.C. Section 528. We help people file for bankruptcy relief under the Bankruptcy Code. The information contained on this website is not to be construed as legal advice. It is not intended to solicit or form an attorney-client relationship. Prior results do not guarantee a similar outcome. This is an attorney advertisement and this website is for information purposes only.