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CHAPTER 13 BANKRUPTCY


Chapter 13 bankruptcy permits individuals with regular income who qualify to reorganize their financial affairs. The debtor proposes a repayment plan for his or her debts.  For example, the plan might propose to cure (catch up on) the arrears (missed payments) on his or her home mortgage. Often, unsecured debts can be reduced, sometimes significantly.  Under certain conditions, a second mortgage or trust deed such as a HELOC loan can be stripped down to an unsecured status and thereby completely eliminated after three to five years.  Further, under certain conditions, car loan balances can be reduced by means of a "cram down."  

To qualify for a Chapter 13, your secured and unsecured debts must be within certain maximum debt total limits.

Only individuals and sole proprietors (not corporations or LLCs) are eligible for Chapter 13 relief.  Chapter 13 bankruptcy is much simpler and far less expensive than a Chapter 11 bankruptcy.

2010, 2011
 
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