Background. A chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.

What does Chapter 13 Protect from?

Seeking Chapter 13 protection allows you to keep all your property. It simply extends the amount of time you have to repay what you owe after the bankruptcy court issues its ruling. Legal fees can be higher in Chapter 13 cases than Chapter 7 cases and your obligation to repay can last for years.

What expenses are allowed in Chapter 13?

The following expenses are typically considered as “allowable living expenses” in a Chapter 7 or 13 bankruptcy proceeding if reasonable in amount:

• Rent or home mortgage payment (including lot rented for mobile home)
• Electricity, natural gas, butane.
• Cable television.
• Internet service.
• Water and sewer.

How long does it take for Chapter 13 to be approved?

The Chapter 13 process The Chapter 13 filing process generally takes 95 days from the filing of the petition to the approval of the repayment plan. But the bankruptcy won’t actually be discharged until the three- to five-year plan is completed.

What can you buy during Chapter 13 bankruptcy?

That means that any money that does not go towards your necessary living expenses must go to the trustee for your Chapter 13 plan. Necessary expenses include housing, food, utilities, cable, phone, Internet, pet care, personal care, diapers, gasoline, transportation expenses, child support, alimony, retirement contributions,…

What are living expenses allowed under a chapter 13 bankruptcy?

In a Chapter 13 bankruptcy, your monthly payment to the court towards your outstanding debt is decided based on your income and the monthly living expenses the court deems allowable. Although you can logically guess at some living expenses, like housing, others might come as a surprise. Food and Clothing.

What kind of debts can you discharge in Chapter 13 bankruptcy?

The most common types of nonpriority unsecured debts that you can discharge in Chapter 13 bankruptcy include: most lawsuit judgments. Keep in mind, however, that you will likely pay a portion of these debts through your Chapter 13 plan. The court discharges the remaining balances at the end of your repayment period.

Are there any exemptions for Chapter 13 bankruptcy?

He’s also unable to protect $50,000 in home equity and a recreational vehicle worth $20,000 with bankruptcy exemptions, so, hoping to keep the house and RV, he’s considering filing for Chapter 13 bankruptcy. Brayden met with a bankruptcy attorney and learned that his discretionary income is $200 per month.