Chapter 13 Bankruptcy for Consumers
Houston Bankruptcy Attorney
Chapter 13 bankruptcy is a debt reorganization plan for individuals. Like a Chapter 11 bankruptcy for business and individuals who exceed the debt limits for eligibility for filing under Chapter 13, it gives you time to catch up on your payments to keep the assets that are important to you, such as your home and your car. Filing Chapter 13 bankruptcy also enables you to reduce the amount you have to pay unsecured creditors, such as credit card companies — sometimes to pennies on the dollar.
At the Law Office of Margaret Maxwell McClure in Houston, Texas, I offer a free initial consultation to explain how Chapter 13 bankruptcy works. I can also help you determine whether you are eligible for Chapter 7 bankruptcy, which is a simpler form of bankruptcy that provides a complete discharge of unsecured debts.
Generally, people file Chapter 13 bankruptcy for the following reasons:
- They do not qualify for Chapter 7 bankruptcy due to the means test
- They have significant assets that they are delinquent in paying for, such as a house, that would not be protected by filing Chapter 7 bankruptcy.
They have tax debts that can be discharged in a Chapter 13 bankruptcy but not in Chapter 7 bankruptcy.
Chapter 13 bankruptcy is essentially a debt consolidation and repayment plan. Under this plan, you will pay back all of your secured debt (debt that is backed by collateral, such as you home or your car) in full over a three- to five-year period. You will pay back a percentage of your unsecured debt (like credit card and hospital bills) after you and your lawyer have created a budget for you. The percentage will be determined by how much you can afford.