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Understanding Chapter 13 Bankruptcy

Helping Missouri & Illinois residents reorganize debt, stop foreclosure, and regain control of their financial future.


What Is Chapter 13 Bankruptcy?


Chapter 13 bankruptcy is a legal process that allows individuals with a regular income

to create a repayment plan to pay back all or a portion of their debts over time.

It's often called a "wage earner's plan" because it helps you keep your property while catching up on what you owe.


Unlike Chapter 7, which eliminates certain debts, Chapter 13 reorganizes your debts into a 3 to 5 year repayment plan under the protection of the bankruptcy court.



Who Qualifies for Chapter 13?


To qualify for Chapter 13 bankruptcy, you must meet certain requirements:


  1. You have a regular source of income

  2. Your unsecured debts are less than $465,275 (as of 2024)

  3. Your secured debts are less than $1,395,875 (as of 2024)


These limits change periodically, so it's important to speak with an attorney

to see if Chapter 13 is right for you.



Benefits of Chapter 13 Bankruptcy


  • Stop Foreclosure

Catch up on missed mortgage payments and keep your home.


  • Keep Your Property

Protect your home, car, and other valuable assets.


  • Repay Debts Over Time

Create a manageable plan that fits your budget.


  • Discharge Remaining Debt

After completing your plan, remaining eligible debts can be discharged.



How Does a Chapter 13 Repayment Plan Work?


Here's how the process typically works:


  1. File Your Petition - We file your case and stop creditor actions immediately.

  2. Propose a Plan - We create a repayment plan based on your income and expenses.

  3. Court Approval - The court reviews and approves your plan.

  4. Make Payments - You make monthly payments to a trustee.

  5. Complete the Plan - After 3 to 5 years, you finish your plan and receive a discharge.



What Debts Can Be Included?


Chapter 13 can help with many types of debt, including:


  • Mortgage arrears

  • Car loans

  • Credit card debt

  • Medical bills

  • Personal loans

  • Utility bills


Take the First Step Toward Financial Relief


Chapter 13 bankruptcy can provide the relief you need while allowing you to keep what matters most. Our experienced team is here to guide you every step of the way.


Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. For guidance regarding your specific situation, please contact A & L, Licker Law Firm, LLC directly.

 
 
 

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