Montgomery, AL Chapter 13 Attorneys Help Clients Navigate Reorganization

Alabama Bankruptcy Law Firm Concentrates on Chapter 13

Chapter 13 bankruptcy gives a debtor the chance to use his or her income to pay some or all of what they owe their creditors over three to five years, depending upon the amount of debt, income and property owned. In return for sticking to their repayment plan, the debtor may be allowed to keep valuable non-exempt property.

Only debtors with a consistent source of income are eligible to file for chapter 13 bankruptcy. Consistent income can include wages or commission earned through a job, child support payments received, social security benefits, regular assistance from family and a variety of other sources.

How Does Chapter 13 Bankruptcy Work?

When someone files for chapter 13 bankruptcy, they propose a three-to-five-year repayment plan. The plan must be approved by the bankruptcy court and offer to pay off all or part of their debt with future income. If the bankruptcy petitioner sticks to the terms of the repayment plan, all their remaining dischargeable debt will be discharged at the end of the plan. The amount that the debtor will be required to repay is determined by various factors, including:

• Their monthly income
• The difference between monthly earnings and the amount reasonably spent for the maintenance and support of the debtor’s family
• What is required to cover administrative expenses, cure obligations, and meet the best interests of creditors test

Chapter 13 bankruptcy offers several advantages over chapter 7 (straight bankruptcy). Most notably, chapter 13 filers will be able to stop home foreclosure proceedings and catch up delinquent mortgage payments. Chapter 13 also allows petitioners to extent their debts over the life of their plan, potentially lowering their monthly payments.

Contact an Experienced Montgomery, AL Chapter 13 Bankruptcy Law Firm

If you are looking for legal advice regarding chapter 13 bankruptcy, contact the Alabama Chapter 13 bankruptcy attorneys at Bone and Botes, P.C. online or call 1-877-581-3396 to set up your initial case evaluation today.