A reorganization bankruptcy is normally used when there is ongoing income that can be used to pay creditors. Chapter 13 of the Bankruptcy Code generally covers individual consumer debtors with lower debts. Filing for reorganization also generates an automatic stay of most collection activity. The debtor then develops a repayment plan to pay debts over a 36 to 60 month period and has that repayment process overseen by a bankruptcy trustee. At the successful conclusion of the payment plan, if certain conditions are met, the remaining dischargeable debt is eliminated. Chapter 13 debt reorganization can reduce monthly payments on secured debts, such as cars and appliances, and can virtually eliminate payments on unsecured consumer debt such as credit cards. Except in rare circumstances, Chapter 13 bankruptcy cannot reduce monthly mortgage payments.
In Chapter 13, you keep your assets, keep your car, keep your house, and pay what can be paid to your creditors over a period of time, generally 36 and 60 months. The Law Office of Raymond A. Kenney, PLLC can propose an appropriate plan and negotiate its acceptance with creditors, many of whom might object to the court’s confirmation of the Chapter 13 bankruptcy plan.
Many of our bankruptcy clients have experienced an unexpected and severe financial downturn usually caused by sudden events such as job loss, business failure, illness or divorce. Mr. Kenney understands the difficulty of struggling to balance payments and debt with income, and the stress that comes with the possibility of losing your home, business, car and other property. If you are facing one of these types of situations, filing bankruptcy may be the right answer for you.
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