Chapter 13 Bankruptcy
What is a Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. The plan must be approved by the court to become effective. Once the plan is approved, creditors will be prohibited from collecting their claims directly from the debtor. The debtor must make all payments under the terms of the plan to keep the court protections and receive a discharge.
Who can File a Chapter 13 Bankruptcy in Virginia?
The most important criteria for a person to be able to file for Chapter 13 bankruptcy is that the individual must have a regular income. There are a few other criteria that must be met for filing a Chapter 13 Bankruptcy and your attorney will be the best person to introduce you to these!
How does a Chapter 13 differ from a debt consolidation service?
In a Chapter 13, the court has the power to protect the debtor from the actions of creditors. A private debt consolidation service does not. The court has the power to prohibit creditors from garnishing wages, foreclosing on the debtor’s home and from repossessing the debtor’s automobile. The court also has the power to force certain creditors to accept a Chapter 13 plan that pays only a portion of the claim. Debt consolidation services have none of these powers and they usually cause you to waste much of your income and assets.
Further, debt consolidation services are not authorized to give legal advice to anyone and to do so is a criminal offense. Only an attorney licensed by the state is allowed to give legal advice.
Get a free consultation with one of our Bankruptcy Lawyers.
If you are struggling with debt, but aren’t sure whether a Chapter 7 or Chapter 13 is the best option for you, we would be happy to speak with you and give you legal advice. We do not charge a consultation fee for bankruptcy cases.