Credit Card Debt Relief
Chapter 13 FAQs
Providing Bankruptcy information, advice and debt relief in Metro Denver, Colorado (CO),
including Littleton, Englewood, Centennial & Aurora in Arapahoe County, Highlands Ranch
and Castle Rock in Douglas County, and south Jefferson County, Colorado CO
Serving the entire south Denver, Colorado (CO) Metropolitan area, including
Littleton, Englewood, Centennial & Aurora in Arapahoe County, Highlands
Ranch and Castle Rock in Douglas County, Denver and south Jefferson County,
Colorado. Evening and weekend appointments are available.
This Law Firm is a federally designated DEBT RELIEF AGENCY as defined in the 2005 amendments to the
US Bankruptcy Code. This law firm provides legal advice regarding filing bankruptcy and represents
people and small businesses in filing for bankruptcy relief under the U.S. Bankruptcy Code. Debt Relief
DiSante Law Offices
1150 W. Littleton Blvd. Ste 200 Littleton, CO 80120
303.797.3311 - fax 303.797.8280
(Note: the following answers to frequently asked questions about Chapter 13 Bankruptcy
provide generalized comment on Bankruptcy law and procedure in Colorado and may not
apply in all fact situations. They are not a substitute for consultation with an experienced
1. Who can file a Chapter 13 plan?
Only individuals or a married couples (not corporations or partnerships) can file a
Chapter 13, if their secured debts don't exceed approximately $1,010,650 and their
unsecured debts don't exceed approximately $336,900. Those with larger debts must
use Chapter 11 if they want to avoid Chapter 7.
2. Can my creditors stop me from filing a Chapter 13 plan?
No, creditors cannot stop you from exercising your right to file under Chapter 13. The
key issue is whether your Chapter 13 plan meets the requirements of the law and
experienced legal counsel is invaluable to help you in this regard.
3. After having my car repossessed, a house foreclosure or other legal
problems, can I still file Chapter 13 and stop these actions?
Yes, Chapter 13 stops almost all types of court actions until you have a chance to
decide what you want to do with the item.
4. How does Chapter 13 basically work?
A Chapter 13 plan permits persons with a regular source of income to pay part or all
of their debts under the protection and control of the bankruptcy court. Commencing
30 days after filing your petition and plan of repayment with the court, you generally will
pay the court a fixed sum of money per month on your old debts, and pay your current
monthly expenses directly to your creditors.
The bankruptcy law requires that the payments you make through the plan to
unsecured creditors have a value of at least what the creditors would have received if
you had chosen to file a Chapter 7 case. It also requires that you make a "best effort"
which generally means pay all of your disposable income (Income minus living
expenses) to the Court for three years to five years. The length of the plan is
determined by a calculation required by the law. As you can see, preparation and
justification of your budget is very important in making a plan that will be accepted.
5. For what kinds of situations is Chapter 13 best suited?
Generally, Chapter 13 can be preferable where:
- Mortgages and car loans need to be caught up
- Large tax debts exist
- Equity in property is substantial
- Co-signers need protection from your debt
- Child support arrearages need to be caught up
- Non-dischargeable Chapter 7 debt such as fraud, willful injury
- You have a strong desire to repay debt
In a typical case with these problems, the plan would provide that one would make all
future payments on the secured loans to the creditors on time and pay a fixed amount
to the court each month which the court would use to pay the trustee, attorney, taxes
and secured loan arrearages, with any excess to go to the unsecured creditors. In
addition, if one owed more on a secured debt than the property is worth (except real
estate), then the plan can provide for payment of only the value of the property to the
creditor to satisfy the lien, and treat the rest of the debt as an unsecured debt.
6. Must you be employed to use a Chapter 13 plan?
No, but you must have a steady source of income, such as self employment or a sole
proprietorship, a pension, unemployment insurance, disability insurance, Social
Security, trust income, spousal maintenance or child support.
7. What about new debt after the Chapter 13 is filed?
Chapter 13 mainly deals with your old bills. Your usual living expenses for rent or
mortgage, food, clothing, insurance and utilities will come out of your remaining
income after your Chapter 13 plan is paid. You will need special permission of the
Court to incur substantial new debt beyond what is on your budget, such as a new car
loan or mortgage loan during the Plan.
8. Are my co-signers on consumer debts also protected?
Yes. If someone cosigned for you on a loan or purchase, he will be insulated from the
creditor as long as your Chapter 13 plan stays in effect and pays 100% percent of the
cosigned debt, including interest and late charges. Keep in mind that you can choose
to pay 100% percent of a co-signed debt, yet only pay a small portion of your other
9. How long does a Chapter 13 plan last?
The usual time frame is 36 months to 60 months, depending on certain calculations.
More ofter than not, the 60 month duration will be required.
10. Can I consolidate all my bills?
Yes, except your post-petition mortgage, car loan and other secured payments.
Unless special circumstances exist, your post-petition secured loan payments will be
paid on your own, outside the Chapter 13 plan. Any secured loan payments that you
missed prior to filing your plan (pre-petition payments) will be included in the plan.
11. If I filed bankruptcy in the past eight years, can I still file a Chapter 13 plan
You can file a Chapter 13 to reorganize and pay debt any time, but cannot obtain a
discharge of debt in a Chapter 13 if you received a discharge in a Chapter 7 in the
four (4) years prior, or a discharge in a Chapter 13 case in the two (2) years prior.
12. How does Chapter 13 affect taxes that I owe?
This is one of the benefits of Chapter 13. Usually, your taxes will be one of the first
creditors paid by the plan, and interest and penalties will not accrue during the plan.
Some older taxes may be treated similar to general unsecured debts, and even
though not paid in full, will be discharged at the end of the plan.
13. How does Chapter 13 affect my general unsecured creditors?
So long as your plan is in effect, and you pay your ongoing expenses, all creditors are
prevented from pursuing you or your property in legal actions. Also, no new interest or
penalties accrue on the unsecured debts unless your plan is dismissed for your failure
to comply with its terms.
14. Do I need a cosigner to file Chapter 13?
15. What if I run into additional financial difficulty during the Plan?
If the difficulty is temporary, we can usually work out a "catch-up" deal with the Chapter
13 Trustee or your mortgage company. If you are unable to catch up, but can still make
plan payments, with good cause we can move the Court to modify your plan to change
the length of the plan or the amount of the payments. The key is to keep in touch with
your attorney as soon as difficulty in making plan payments occurs, rather than let the
plan fall into default.
16. What happens at the end of my Chapter 13 Plan?
If you have made all of your plan payments, the plan ends and any remaining
dischargeable debts are discharged.
For further information regarding the bankrupcy process, click on any of the
links on this page. Or contact us to arrange a free consultation with an
experienced attorney, without cost or obligation on your part.
Call us today,
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Considering filing for Bankruptcy or looking for Bankruptcy alternatives?
Contact our office to discuss your case, without cost or obligation at:
303.797.3311 or DiSanteLaw@comcast.net