Chapter 13 is a reorganization bankruptcy. With this form of bankruptcy, you get an automatic stay as soon as you file. This shields you from most collection efforts while the bankruptcy is in progress, so you get some immediate relief. You create a repayment plan that will span for three years or five years when you are going through this type of bankruptcy.
The court allows you to maintain possession of enough resources to satisfy your basic necessities, and income that is looked upon as disposable income will be earmarked to pay your debts over the course of the repayment plan. Certain debts are considered to be priority debts, and they are placed ahead of non-priority debts like medical expenses and credit card debt. If there is not enough disposable income to pay these non-priority debts, they can be discharged in a Chapter 13 bankruptcy. This type of bankruptcy will stay on your credit report for seven years, but that does not mean that you cannot obtain new lines of credit sooner.
Most individuals will qualify for a Chapter 13 bankruptcy filing. However, if you have an extraordinarily high level of debt, you may not be eligible because there are debt limits. We use the word “limits” in the plural because there are different parameters for secured debt and unsecured debt. The limit for secured debt (like real estate and motor vehicles) is $1,184,200. For unsecured debt, the Chapter 13 debt limit is $394,725. If your debt exceeds these limits, you still have recourse. You could choose to file for a Chapter 11 bankruptcy, which is another type of reorganization that is usually utilized by businesses.
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We serve people in Vancouver and the Tri-Cities area in Washington, and we also have offices in Portland, Eugene, and many other cities in the state of Oregon. If you are interested in a bankruptcy filing, our doors are open, and we offer complementary, no obligation initial consultations. You can request an appointment right now through this website if you click this link and fill in the form that you see: free bankruptcy case evaluation.