David R. Black's Bankruptcy Legal Group
a division of Black, Stranick & Cella, P.C.
Chapter 13 Filing in Philadelphia & Media
What is a Chapter 13 Personal Bankruptcy?
Chapter 13 is the chapter of the Bankruptcy Code providing for the reorganization or adjustment of debt for an individual with regular income. Chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with a regular income to develop a plan to repay all or part of their debt. Under this chapter, debtors propose a repayment plan to make regular payments to their creditors over a three to five year period. In no case may a plan provide for payments over a period longer than five years.
Chapter 13 Eligibility
Individuals who are denied protection under Chapter 7 because their income level is too high may file a Chapter 13 suit. A Chapter 13 filer’s unsecured debts must be less than $336,900 and their secured debt must be less than $1,010,650.
How it Works
In a Chapter 13 lawsuit, a court appointed trustee oversees the case and administers the debtor’s repayment plan. The trustee is responsible for collecting payments from the debtor and making distributions to creditors. Once the bankruptcy petition is filed an “automatic stay" goes into effect preventing creditors from taking further collection actions against the debtor and the stay remains in effect throughout the term of the lawsuit. Debts are only discharged once the payments under the plan have been completed.
Certain debts can not be discharged in a Chapter 13 personal bankruptcy suit including debts for alimony or child support, certain taxes and student loans, and some debts related to crimes that the debtor may have committed.
The Chapter 13 bankruptcy laws are complex and have recently undergone some changes.
