Chapter 13
In The Tulsa Oklahoma Area
Court Filing fee $310
Chapter 13 is designed for consumer individuals with regular income who find it beneficial to pay part of their debts in installments over a period of time. An individual’s ability to qualify for Chapter 13 is contingent upon many things best addressed by an attorney.
Under Chapter 13, the debtor must file with the court a plan to repay creditors all or part of the money that is owed, using the debtor’s future earnings. The period allowed by the court to repay the debts may be three years or up to five years, depending upon the debtor’s income and other factors. The court must approve the plan before it can take effect. Chapter 13 cases vary from situation to situation. For example, there are plans where the debtor doesn’t have much income and pays only their secured and priority debts and nothing else. There are plans where the debtor has a large income and pays every creditor 100% of the debts (with filed claims). Finally, there are cases in between where the debtor’s income is more than enough to pay back just the secured and priority debts, but not quite enough to pay every creditor 100%.
Advantages:
- Debtors usually get to keep their assets, with few exceptions.
- Stops foreclosure sales, collection efforts, garnishments, repossessions and state court actions to recover money
- Mortgage or Auto Arrearages can be cured over the life of the Chapter 13 plan
- Car payments restructured to be paid over course of the Chapter 13 plan – for many filers, that results in smaller monthly car payments
- Taxes can be repaid without penalties accruing and at a discounted interest rate
- Discharge unsecured debts such as credit cards, personal loans, lines of credit, payday loans, car/house loan deficiencies, income taxes (if older than 3 years old and no tax lien), medical bills, utilities, etc.
- Stops collection efforts, garnishments, repossessions and state court actions to recover money
Disadvantages:
- More expensive than Chapter 7.
- The process is far longer than a Chapter 7.
- Discharge is not entered until all plan payments are made in 3 to 5 years, depending on your plan length. This means you are not officially “done” with your obligations to repay until you make it to your final payment.