Chapter 13

Chapter 7 vs. Chapter 13?

A Chapter 13 case involves most of the same forms and information you would provide in a Chapter 7 case filing. However, the core of a Chapter 13 is the Chapter 13 Plan. It is a plan or reorganization of your debt that is approved by the court. What a plan will provide will differ in every circumstance as they are tailored to each person's individual debt issues. Some plans will pay all of the creditors back 100% of what is owed and others will pay just a few cents on the dollar. The plans run in length from a minimum of 36 months (unless all the debts are paid in full before then or up to a maximum of 60 months depending on factors like what kind of disposable income is available to fund the plan and what debts need to be satisfied (some debts, like secured debts, and priority claims as in taxes and domestic support obligations are required to be paid in full over the term of the plan). In essence, you would make a monthly payment to the Chapter 13 Trustee who administers the funds in your Chapter 13 case and makes distributions to your creditors based on the terms of the Chapter 13 plan and the proofs of claim filed by your creditors once they have received notice of your case filing.