In this type of bankruptcy, also known as “reorganization bankruptcy,” you make payments to the bankruptcy trustee. Chapter 13 bankruptcy tends to be the best fit for those fail to pass the “means test” for Chapter 7, and it works well for those who have fallen behind on their car or mortgage payments or owe a large tax debt.

Chapter 13 bankruptcy gives you a three-to-five-year period to catch up on delinquent payments. The trustee will distribute your payments to the secured creditors or tax agencies first, and if anything remains, the rest will be paid to unsecured creditors (like credit card debts). At the end of this bankruptcy period, you will be caught up on all your secured debts and any remaining unsecured debt will be discharged (it legally goes away).

Preparing Chapter 13 bankruptcy can be very complicated. It is important for you to choose an attorney who cares about your future. We are here to help. Call us to set an appointment to discuss your options.