What Is Chapter 13 Bankruptcy?
When planning to file for bankruptcy, your lawyer will help you determine which type of bankruptcy best fits your financial situation. Chapter 13 Bankruptcy is a repayment plan wherein you will continue repaying your debts to creditors, either partially or in full. However, you will likely only partially pay your debt to creditors.
If you choose Chapter 13 Bankruptcy, you will have to repay your debt in either 36 or 60 months. If your gross income is below the average income for your stage, a 36-month payment plan is proposed to the court. Meanwhile, if your gross income is above average for your state, your lawyer will propose a 60-month payment plan.
How Does a Chapter 13 Payment Plan Work?
A Chapter 13 Bankruptcy plan should propose a certain amount that you will have to pay back to creditors. This can range from 0% to 100%. Moreover, this payment plan should also include the time period over which you will pay back the amount. After filing your bankruptcy case, the first payment is due in 30 days. The trustee appointed to your bankruptcy case will then distribute payment to your creditors.
Get in Touch With an Expert Bankruptcy Lawyer
For more information on bankruptcy laws, turn to the Law Offices of Steven Ibarra. Our legal team is determined to help you understand your financial rights and make the right decisions when filing for bankruptcy. To schedule a free consultation, call us today at (562) 249-2122 or fill out our online contact form. We will reach out to you as quickly as possible. We proudly serve residents in Whittier, CA, and the surrounding areas.