Chapter 13 Bankruptcy Help

How Repayment Works

The amount you pay into the plan is based on disposable income after necessary living expenses. Payments go to the Chapter 13 Trustee, who disburses funds to creditors according to the plan. Secured creditors and priority debts are paid first. General unsecured creditors often receive only a small percentage of the amount claimed, and any unpaid balance can be discharged after you complete plan payments.

Many clients appreciate that attorney fees are typically paid inside the plan after filing, reducing up-front costs. Self-employed or small-business debtors may deduct necessary business expenses when calculating disposable income.

Keep Your Property

In Chapter 13, you keep your exempt and non-exempt property. Rather than selling non-exempt property, the plan usually pays its value to unsecured creditors over time. This structure is often the better choice when you have assets to protect or need time to catch up on a mortgage or car.

Cramdown and Interest Adjustments

Chapter 13 may allow a “cramdown” on certain secured debts when the collateral is worth less than what is owed. The secured portion can be reduced to the current value of the property, with the remainder treated as unsecured debt.

• Vehicles: Pay the car’s current value as secured and the balance as unsecured, with interest adjusted near prevailing prime-based rates. You must keep insurance current.
• Other items: Furniture and appliances can sometimes be valued and paid through the plan based on present worth.

Rules and eligibility for cramdown vary. We will review how they apply in your case.

Who Chapter 13 Helps

• Homeowners behind on mortgage payments who want to stop foreclosure and catch up
• Drivers behind on car loans who need to stop repossession and lower payments
• Families with tax debts or support arrears that must be paid in full over time
• Debtors who are not eligible for Chapter 7 or who have significant non-exempt assets to protect

Timeline

1. File: The automatic stay begins and most collections must stop.
2. Trustee meeting: Generally 30 to 45 days after filing.
3. Plan confirmation: The court considers approval after required documents and payments are in place.
4. Payments: Make one monthly payment for 36 to 60 months depending on income and plan terms.
5. Discharge: After completing plan payments and certifications, remaining eligible unsecured balances can be discharged.

Our Process

• Free consultation and straightforward review of Chapter 13 versus Chapter 7
• Customized plan that fits income, exemptions, and priorities like home or vehicle
• Document checklist and filing support to avoid delays
• Preparation for the trustee meeting and guidance through confirmation
• Credit rebuilding tips after discharge

Office: 430 Church Street, Suite 2, Sulphur Springs, TX 75482. Serving Northeast Texas including Sulphur Springs, Mt Vernon, Mt Pleasant, Greenville, Paris, Commerce, Saltillo, Purley, Winfield, and Miller’s Cove.

This page provides general information, not legal advice. Results depend on your facts and the law that applies to your case.