What is Chapter 13 bankruptcy?

Relief from Your Stubborn Debt

Chapter 13 is often referred to as "wage earners bankruptcy." It provides individuals with relief from their debts, but unlike Chapter 7, does not require the liquidation of personal assets or property. Under the terms of Chapter 13, a debtor's unsecured debts are consolidated and paid off in installments, in accordance with a creditor payment plan. The plan allows the debtor to cover basic living expenses, but the bulk of the debtor's income will go to paying off debt over a period of three to five years. Once the final installment has been paid, the debtor receives a discharge of all debts included in the bankruptcy, whether or not those debts have been paid in full.

If you file for Chapter 13, you will be required to submit a detailed budget to the bankruptcy court, along with other pertinent documents addressing your income and financial situation. The compiling of these documents can take time, and it can be a costly proposition if you leave any of them out by mistake. The legal team at Price Law Group can increase your chances of a successful filing by assisting you in gathering and completing the necessary paperwork.

Discharge Your Debt!

In general, tax debt cannot be discharged through bankruptcy. However, by including your tax debt in your Chapter 13 payment plan, you can freeze any interest or penalties connected to the debt. Your payments will go directly to the principle balance owed, thereby reducing the total amount of money you will eventually pay towards the debt. If you would like more information about the benefits and protections available to you through Chapter 13, an attorney from Price Law Group is available to answer all of your questions.