Chapter 13 Bankruptcy – Attorney David M Cook

A Chapter 13 bankruptcy is a personal reorganization bankruptcy.

A Chapter 13 bankruptcy is a personal reorganization bankruptcy.


Chapter 13 Bankruptcy provides an opportunity to retain your assets even when you have more equity than allowed under Chapter 7 bankruptcy.  It also allows you to repay and restructure your secured debts with manageable payments often with better terms than under your original contract.    Chapter 13 Bankruptcy is not the same as debt consolidation.  Under Chapter 13, one rarely has to pay back all of one’s debt.  Therefore, it is not simply a “repayment plan.”  It can even offer a better deal than Chapter 7 can offer in many cases.  It offers a wide array of protection and advantages.  A Chapter 13 Bankruptcy will:

  • Stop foreclosure, garnishments, and allow you to recover a repossessed vehicle;
  • Provide a way to repay delinquencies on secured loans such as mortgage and car payments.
  • Provide a way to repay or eliminate tax debt;
  • Reduce or often simply eliminate unsecured debt;
  • Strip-off 2nd and 3rd mortgages if your home is upside down;
  • Allow you to retain your possessions and assets;
  •  Reduce interest rates on secured debts such as vehicle loans.

Things to Consider:

  • Does your monthly budget allow for repayment of certain debts?  Keep in mind that most unsecured debt will be eliminated, but you need to repay at least the market value of secured debts.  This is accomplished by making a monthly payment to the Trustee who will then pay your creditors.  A Chapter 13 is generally based on 1) your historical income, 2) your ability to repay debts based upon extra money in your monthly budget, and 3) the amount of equity you have in your unsecured assets.
  • A Chapter 13 will generally last 3 – 5 years depending on 1) whether your income is above or below the median income, 2) the amount you need to pay back, and 3) your extra monthly income.

A Chapter 13 Bankruptcy offers greater leniency, creativity and can often discharge more debt than under Chapter 7.  Through monthly budgeting you will learn the principles and practices of good financial mastery.  Most people qualify for a Chapter 13 Bankruptcy.  Meeting with an experienced and knowledgeable bankruptcy attorney will help you better understand the process and advantages that a Chapter 13 Bankruptcy provides.

If you live in Northern Utah and are considering your debt management options I encourage you to call me.  I can guide you to the option that is best for you.