Chapter 13

There are generally two chapters of bankruptcy available to individuals–chapter 7 and chapter 13. While chapter 7 is less expensive and takes less time to complete, chapter 13 might be a better option for you depending on your situation.

There are numerous situations where a chapter 13 is more advantageous but I see three situations that commonly occur where a chapter 13 is a better option. First, you want to keep your house and you have more equity in your house than the exemption under the Utah Code allows. Second, you want to keep your car and you have more equity in your car than the exemption under the Utah Code allows. Third, you make over the median income in the state you live in and you have too much disposal income in which case you will not be allowed to file a chapter 7.

Here are some of the key features of a chapter 13 bankruptcy.

  • Chapter 13: Reorganization
  • Repayment of some or all debts
  • Keep assets like home and cars
  • Three or five years of payments
  •  If you make too much money, you might be forced to do a chapter 13 instead of a chapter 7
  • If you need to keep an asset (like a house) often times chapter 13 is a better solution
  • Cost: upfront attorney’s fees, filing fee, the remainder of attorney’s fees are paid through the chapter 13 plan over time, attorney’s fees for chapter 13 are set by the court
  • The advantage of a chapter 13 is that it can help you to keep your house or your car

Here is a basic timeline of how a chapter 13 usually proceeds.

1. Planning
– Free consultation
– Case acceptance (filing fee plus attorney’s fees)
– Compile documents
– Complete Credit Counseling Class (pre-petition class)
2. Filing
– Petition Filing
– Automatic Stay goes into effect (stays creditors)
3. Meeting of Creditors
– § 521 Required Documents (make sure we have all documents)
– § 341 Meeting of Creditors (about 1 month after filing)
– Complete Financial Management Class (post-petition class)
4. Make Payments
– Make monthly payments to trustee
– Confirmation Hearing
5. Discharge of Debt
– After 3 to 5 years of payments, debt is discharged

Not sure if chapter 13 is right for you? Please feel free to call me, text me, email me, or fill out the Free Bankruptcy Consultation Form and I will get in contact with you.

Email: sean@ruddfirm.com
Cell phone: 801-923-8685