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Guidance For Those Exploring Chapter 13 Bankruptcy

For many people burdened by debt, bankruptcy offers a path to a fresh financial start. Chapter 13 is one such path. It provides a way to get out from under unmanageable debts such as medical bills and credit card debt. It also can offer a way to keep your home with more affordable monthly payments.

Because bankruptcy is such a big decision, it’s important to get professional legal guidance on whether Chapter 13 is right for you. I’m Keith Borders, a Chapter 13 bankruptcy lawyer in Ohio and the founder of Borders Law, LLC. I can help you understand your bankruptcy options. Based in Cleveland, I offer the benefit of extensive experience in this nuanced area of law. I have spent over 20 years practicing in this area of law and have helped thousands of clients successfully pursue a fresh start through bankruptcy. I can help you, too.

What Exactly Is Chapter 13 Bankruptcy?

Chapter 13 is one of two common types of consumer bankruptcy (the other being Chapter 7). It’s a good fit for people who make too much money to qualify for Chapter 7. It’s also good for homeowners.

Through Chapter 13, you will get a three- to five-year repayment plan that consolidates most of your debts into a single affordable monthly payment. After that repayment period, any remaining eligible debts will be discharged (erased).

Chapter 13 can allow you to keep your home, avoid foreclosure, get rid of second mortgages and eliminate other eligible debts.

How Is Chapter 13 Different From Chapter 7?

Chapter 13 bankruptcy offers individuals a structured way to manage overwhelming debts while keeping valuable assets. Unlike Chapter 7, which focuses on liquidating assets, Chapter 13 enables you to reorganize debts into a manageable repayment plan. This plan allows you to pay back creditors in a way that aligns with your financial capabilities.

Unlike Chapter 7, which is only eligible for those who pass a “means test,” there are no income or asset limits for Chapter 13. This makes it ideal for homeowners and higher income-earners. Additionally, Chapter 13 can halt foreclosure proceedings and provide the opportunity to catch up on missed mortgage payments, offering greater flexibility for long-term financial recovery.

The timeline for Chapter 13 is longer than Chapter 7. While Chapter 7 may be resolved within a few months, the repayment plan under Chapter 13 spans three to five years. This extended period allows individuals to gradually repay their debts. It provides more time to restructure financial obligations and ensure a balanced repayment plan, offering a more sustainable path to financial stability.

Learn more about the differences between these two types of bankruptcies.

Breaking Down The Chapter 13 Bankruptcy Process

The process begins by filing a petition with the appropriate Ohio bankruptcy court, accompanied by detailed documentation of your financial situation. Your must disclose your income, expenses, assets and debts. You must also submit a proposed repayment plan outlining how you intend to make payments over the designated time period. This plan must comply with legal standards and be approved by the court.

Once your petition is filed, an automatic stay is initiated, halting creditor collection efforts, including foreclosure and repossession actions. A bankruptcy trustee is appointed to oversee your case, ensuring compliance with the repayment plan and handling creditor communications. Creditors will also have an opportunity to review your plan and raise any objections.

If approved, you will begin payments as outlined in your plan. Upon successful completion, remaining eligible unsecured debts may be discharged, providing a clean financial slate.

Learn More About Whether Chapter 13 Is Right For You

I would be happy to discuss your options during a free initial consultation. Call 216-435-5668 to learn more and discuss my affordable attorney fees. I have multiple convenient offices and can handle bankruptcy cases virtually, without the need for in-person involvement.

My firm is a debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.