What is Chapter 13 and how does it work?
Chapter 13 Bankruptcy Attorney Katy Texas attorney Eric Southward explains that, Chapter 13 is that part of the federal bankruptcy laws that permits a person to repay all or a portion of his or her debts under the supervision and protection of the bankruptcy court. Under chapter 13, the person filing the case, who is called the debtor, submits a plan for the repayment of all or a portion of his debts to the court, which must approve the plan for it to become effective. The court prohibits the creditors from attempting to collect their claims from the debtor and permits the debtor to make regular payments in the amounts called for in the debtor’s plan to the chapter 13 trustee for the period of time specified in the plan. The chapter 13 trustee collects the money paid in by the debtor and disburses it to the creditors as set forth in the debtor’s plan. Upon the completion of the payments called for in the plan, the debtor is discharged form any liability for the remainder of his debts.
2. What is a Chapter 13 discharge?
It is a court order releasing a debtor from all of his or her dischargeable debts and ordering the creditors not to attempt to collect them from the debtor. A debt that is discharged is one that the debtor is released from and does not have to pay. There are two types of chapter 13 discharges: one that is granted to a debtor who has completed all of the payments called for in his plan, and one that is granted to a debtor who is unable to complete the payments called for in his plan due to circumstances for which he should not justly be held accountable. The discharge granted upon the completion of a chapter 13 plan discharges more debts than the other type of discharge.
3. What debts are not released by a chapter 13 discharge?
The chapter 13 discharge is granted after the completion of all payments under a chapter 13 plan releases a debtor from all debts except:
1. Debts that are paid outside of the plan,
2. debts for alimony, maintenance, or support,
3. installment debts whose last payment is due after the completion of payments under the plan, and
4. debts incurred during the time the plan was in effect that were not paid under the plan.
The chapter 13 discharge is granted when a debtor is unable to complete the payments under a plan due to circumstances for which he should not justly be held accountable releases the debtor from all debts except:
1. debts secured by mortgages or liens (secured debts),
2. debts that are paid outside of the plan,
3. installment debts whose last payment is due after completion of payments under the plan,
4. debts incurred during the time the plan was in effect that were not paid under the plan, and
4. What is a chapter 13 plan?
It is a written plan presented to the bankruptcy court by a debtor that states which of the debtor’s debt should be paid, how much should be paid on each debt, how much of the debtor’s earnings or other property should be paid to the chapter 13 trustee,
How long the payments should be paid to the chapter 13 trustee, how long the payments should continue, which debts should be paid outside of the plan, and certain other technical matter.
5. What is a chapter 13 trustee?
A chapter 13 trustee is an officer of the court appointed to collect payments from the debtor, make payments to creditors in the manner set forth in the debtor’s chapter’s 13 plan, and administer the chapter 13 case until it is closed. The chapter 13 trustee is required to perform certain other technical duties in a chapter 13 case, and the debtor is required to cooperate with the chapter 13 trustee.
6. Must all debts be completely paid off under a chapter 13 plan?
No. Certain debts, such as debts for certain taxes and fully secured debt, must be paid in full under a chapter 13 plan, but only an amount that the debtor can reasonably afford must be paid on most debts. The unpaid balance of most debts not paid in full under a chapter 13 plan may be discharged upon the completion of the plan.
7. Where is a chapter 13 case filed?
A chapter 13 case is filed in the bankruptcy court in a district where the debtor has lived, had his or her principal place of business located, or had his or her principal assets located, for the greatest portion of the last 180 days. The bankruptcy court is a unit of the federal district court.
8. Does a debtor lose any of this property in a chapter 13 case?
Usually, not. Under chapter 13, debts are normally repaid out of the payments made to the chapter 13 trustee and not out of the debtor’s property. However, if the debtor has considerable nonexempt property and cannot make sufficient payments to pay enough of his debts to satisfy the court, some of his property may have to be used to pay creditors. Also, if a secured creditor is not being paid under the plan, he may be permitted to repossess the property securing his claim if the debt owed to him is not paid.
Our toll-free telephone number is at 1-866-912-9832. You need to learn about all of your options including information about credit, debt, bill consolidation services and federal bankruptcy law. Please call us at 1-866-912-9832 so that we can discuss your case.You can also visit our web site: www.busby-lee.com. Our attorney fees are reasonable, competitive, and court- approved. It is important that you call us soon. Our office is conveniently located near the Galleria and Highway 59 on Hillcroft between Richmond and Westheimer. We also maintain a branch Katy, Texas office at 1804 Snake River Road, Suite, C Katy, Texas 77449 Call us toll-free at 1-866-912-9832 for directions to our office.
We provide bankruptcy services in the greater Houston metro area including the cities of Katy, Sugarland, Pearland, Friendswood, Clear Lake and Galveston. We also handle cases from The Woodlands, Spring and Tomball and cases in Baytown and Channelview.
We handle bankruptcy cases in all of these counties: Brazoria, Chambers, Galveston, Matagorda, Austin, Brazos, Colorado, Fayette, Fort Bend, Grimes, Harris, Madison, Montgomery, San Jacinto, Walker, Waller, Wharton