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Chapter 13 Bankruptcy – The Repayment Plan

Repayment Plan

Chapter 13 is debt repayment plan for individual debtors. When Congress enacted the Bankrutpcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) in 2005, it limited Chapter 7 filings to debtors whose income minus certain allowed expenses are less than the medium income of the state where the debtor resides. Above-median income debtors were expected to repay at least part of their debts over the course of five years plan. The amount repaid in the plan is calculated on a case to case basis, but is typically a fraction of the debts owed.
 
In practice, Chapter 13 also provides some attractive benefits that entice some below-median income to voluntarily file Chapter 13 instead of Chapter 7. These benefits include the ability to retain valuable property that would have to be surrendered in a Chapter 7 and/or to discharge certain types of debts that cannot be discharged in a Chapter 7.
 
To determine if you qualify for Chapter 13 or whether it is the best way to resolve your debts, please complete the Bankruptcy Intake Form and contact our office for a free consultation.
 
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