Chapter 13 is sometimes called "reorganization". It is meant for people with regular incomes. It was designed to save a house from foreclosure, but is also used to save other property. Also, people who have extra income are pushed into this chapter to make some payments on their debts.

There is even less chance to lose property in a Chapter 13 than in a Chapter 7 in most cases because you are paying into a plan (sometimes called a "wage-earner plan") funds which help add to the total amount of property you may keep.

A Chapter 13 lasts three years minimum and five years maximum. During that time, your payments catch up mortgage arrears or missed vehicle payments. They pay past taxes or other "priority" debts. They cover the attorney fees and court costs. If there is money available from these payments, your case will pay something to unsecured debts such as credit cards. Usually, however, credit card interest and late payment charges stop because you are paying in a set amount not the amount the credit card company would charge.

In the end you receive a discharge. Some debts are discharged in a Chapter 13 that are not in a Chapter 7.

What you have to pay into a Chapter 13 should be the amount you can afford which we calculate by taking your income and subtracting expenses that will not be paid in the Chapter 13, such as utilities, food and insurance. The difference is what you can afford and is also you Chapter 13 payment amount. IF you need to pay more than that, because, perhaps, your house arrears are very high, then you either have to find more income, or cut back on your expenses if you want to qualify.

To help ease the stress of considering your options, we offer a free 15 minute consultation.  Call Van Epps & Van Epps today at (989) 723-6777, or complete the contact form provided on this site to arrange for your free consultation.

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Chapter 7 - Chapter 13 - Discharge