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John Ceci PLLC

This is just a general overview of chapter 13 bankruptcy. Your results will depend on your specific situation.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy will stop interest from accruing on your dischargeable debts. All you will pay is the balance owed on the day you file bankruptcy.

For example, if you have a credit card that charges 18% compound interest and a balance of $30,000 then a Chapter 13 bankruptcy will save you about $19,000 in interest over 5 years.

This potentially allows you to be completely out of debt in 3-5 years, which may be impossible without bankruptcy.

The monthly payments can be flexible. They can the same every month or they can start lower and increase over time. 

When you are done making your monthly payments then all remaining debts that are eligible to be discharged will be discharged.

In a chapter 13 bankruptcy the debtor proposes a payment plan, typically between 3 to 5 years. 

The bankruptcy court must confirm (approve) this payment plan. There are certain requirements that must be met in order to get your plan approved.

Many people seem to think that filing under Chapter 13 is bad or should be avoided. This is not true.

There are a number of reasons why a Chapter 13 bankruptcy is every bit as useful as Chapter 7.​

One great example of this is how you can deal with a mortgage in a Chapter 13 bankruptcy. 

You can use a chapter 13 plan to get caught up on your mortgage payments if you are behind. You cannot do so in a Chapter 7 bankruptcy.

You can also use a chapter 13 plan to discharge a second mortgage. You cannot do this in Chapter 7.

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