Filing Chapter 13

Filing Chapter 13


Filing Chapter 13 is filing a type of bankruptcy that provides you protection from creditors while the outstanding debt is settled through a repayment plan. It can be used to halt foreclosure. Depending on what the debts are for, the court may reduce the amount repaid to some creditors. However, once the creditors have received the agreed upon payment via the court, the debt is considered paid in full.

Typically, for those who file Chapter 13, there is an expectation that you will be able to make regular payments, based on current your income level. This is different from filing Chapter 7, where it’s clear you are unable to repay anything. Figuring out which chapter is right for you requires a Means Test (don’t try this online; it’s far more complicated than the form lets on) and review of current income and expenses.

If you qualify for a Chapter 13, your attorney will prepare all the paperwork to be filed with the San Diego bankruptcy court, including your Chapter “13 Plan.” (That’s a proposed budget telling everybody who’s getting paid how much.) There is often some haggling over the plan, but a plan is eventually approved and “confirmed” by the judge.

You’ll be required to provide payments directly to the court. The court in turn disburses payments to each of the Chapter 13 creditors. Usually, the payments are collected by means of a wage garnishment. Once the repayment plan is finished, the court will notify the employer that the withholding is no longer necessary. Your “Chapter 13 Plan” will typically last three-five years. Filing fee is currently $274.00.

Call us at 1-877-261-2217 to schedule your free Fresh Start Planning Session. You’ll get the answers you need, you just need to ask.