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Chapter 13 Bankruptcy - Benefits over a Chapter 7

By Christopher P. Walker

A Chapter 13 Bankruptcy provides an individual debtor (including small business owners) with an opportunity to reorganize their financial affairs in a similar manner to large businesses can under Chapter 11. However, a Chapter 13 is much less expenses than a Chapter 11.

A Chapter 13 debtor has the ability to pay tax debt over time, pay unsecured debt in an amount less than 100%; strip some undersecured liens; and through a hardship discharge eliminate some debt not dischargeable under a Chapter 7.

Only individual debtors (and sole proprietors) are eligible for Chapter 13 and there is a maximum debt limit that must be complied with in order to file. A chapter 13 Trustee is appointed to monitor the debtor's progress throughout the case and is also primarily responsible for collecting the payments from the Debtor and paying it out to creditor who have filed a claim. A Chapter 13 debtor remains in possession of all assets, including assets that usually would be turned over to a Chapter 7 trustee.

A Chapter 13 Debtor needs to prepare and file a plan of reorganization at the start of the case. This sets forth all of the payment to creditors over 3 to 5 years. A copy of the plan must be served on the creditors and the Chapter 13 Trustee. The debtor also has certain reporting declarations to file regarding payments to a mortgage company, tax filings and domestic support obligations.

It is always a good idea to consult an attorney who is familiar with Chapter 13 Bankruptcy prior to filing. If you would like a free consultation, please feel free to call me at 714-639-1990. My office is located at 505 S. Villa Real Drive, Suite 103, Anaheim Hills, CA 92807. It is about one mile from the 55 Freeway in North Orange County, California. 

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Law Office of Christopher P. Walker, P.C.
505 S. Villa Real Drive
Anaheim, CA 92807

Phone: 714-912-9802
Fax: 714-637-1636
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