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Filing for Chapter 13?

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What is Chapter 13 Bankruptcy?


Chapter 13 bankruptcy is often referred to as a wage earner’s plan. Those who have a reliable income can use chapter 13 to create a repayment plan which protects them from liquidation. Under chapter 13, families can be protected against foreclosures. However, mortgage payments must continue to be made. While filing under chapter 13 does not eliminate debts, it does restructure them in a way that allows for lower monthly payments. Individuals have the opportunity to reschedule secured debts and acts much like a consolidation loan. Another advantage is that there are protections in place for third parties, such as co-signers.

Do I qualify for Chapter 13?


Chapter 13 bankruptcy is intended exclusively for individuals, self-employed or employed, and unincorporated businesses. Chapter 13 is not designed for corporations. To qualify for chapter 13, your secured and unsecured debts must not exceed a specific amount. For secured debts, this is around $400,000. For unsecured debts, this is around $1,200,000, however, both of these numbers fluctuate somewhat with the consumer price index.

What will I need to file?


In addition to your lawyer to help you navigate the process, the court will want to see a solid paper trail. This includes tax returns, pay stubs, bank statements, liens, and as much paperwork as you can find on your income and assets. You’ll also need a well-structured budget which details your expenses and monthly spending. Remember, the more organized your paper trail is, the easier the process will be for you. Additionally, you’ll need to provide a certificate of credit counseling. To file for chapter 13, you are required to work with a credit counselor.  Also remember to consider any debts you had cosigned and who should bear the responsibility for those.


How can I protect my family?


Facing bankruptcy is frightening for anyone. There are many ways you can protect your family through this. The first is to have a good lawyer. Steven Willock has been practicing bankruptcy law in Tacoma, WA for more than 6 years, and practiced for another decade before that in the rigorous California. Having a good lawyer in your corner is essential to make the process go smoothly and to ensure the best possible outcome for you and your family. In addition to your lawyer, your best protection is to get organized, and get prepared. Oftentimes chapter 13 debt repayments are resolved through wage garnishments. Having a plan to live on a smaller budget will prepare you for life after chapter 13. Know your options so you can make the best possible decision. Your family will thank you!