Philadelphia Bankruptcy Attorney

Are you considering filing for bankruptcy in Philadelphia?

Chapter 13 Bankruptcy

Philadelphia Bankruptcy Lawyer

If your home is facing a foreclosure, Chapter 13 may be an option for you. Once you have filed a petition for Chapter 13 bankruptcy, foreclosure proceedings automatically will be stayed (stopped or delayed).

Chapter 13 is like the “reorganization” chapter of Bankruptcy. You propose a “plan” for restructuring your debts to pay them off. Oftentimes this is referred to as the “Individual Debt Adjustment” or “wage earner’s plan.” With Chapter 13 you can protect your property from liquidation, which would occur in a Chapter 7 bankruptcy. The debtor is required to pay their bills over a specified period of time, typically 3 to 5 years. During that period of time, creditors cannot pursue collections, contact you, or file lawsuits etc. Foreclosure proceedings may be stayed as well.

An individual with a steady regular income may be eligible for a Chapter 13 bankruptcy, even if they are self employed or operate an unincorporated business. A corporation or partnership is not eligible to file for Chapter 13. If you’re an individual with under $307,675 in unsecured debt and under $922,975 in secured debt, you may be eligible to file for a Chapter 13 bankruptcy. You must also take credit counseling from an approved agency within 180 days before filing. Contact a Philadelphia Bankruptcy Attorney to explore your financial options.

Chapter 13 can be very beneficial to an individual who chooses to petition for this form of bankruptcy. Importantly, it will stay any foreclosure proceedings and may allow for you to pay delinquent mortgage payments over a specific period of time. Creditors not be allowed to contact you or harass you about the money that you owe, and creditors will not be able to file lawsuits against you or start any other collection processes. Chapter 13 can also be better for cosigners, offering them more protection than Chapter 7.

A Chapter 13 bankruptcy is like a debt consolidation, and the debtor makes one monthly payment to a Chapter 13 trustee. The trustee will then distribute payments to various creditors accordingly. This payment is usually calculated as a net cash surplus. For example, if your income is $4,250 per month and $3,500 goes toward your living expenses, you may be required to pay the remaining $750 to your Chapter 13 trustee to pay back the creditors. A payment plan like this will typically last 3 to 5 years.

Filing a Chapter 13 petition with Bankruptcy Court can be a complex process. A large amount of financial information is required and it can be difficult to know and find what you need to provide the Court with. By working with an experienced and knowledgable Philadelphia bankruptcy attorney, you will know that your petition is filed properly and you have the best chance for a new beginning.