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The advantage to a Chapter 13 bankruptcy is that you can keep the property that you may have otherwise lost in a Chapter 7. You may be able to avoid or delay foreclosure. You may be able to eliminate a second mortgage lien on a primary residence or reduce the loan balance and interest rate on a car.

Filing for Chapter 13 Bankruptcy in Colorado

In most cases, a debtor whose income is above the median income for the state does not have the option of filing for Chapter 7 and instead needs to file a Chapter 13 Bankruptcy. However, even if a debtor is below the state median income, he or she may elect to file for a Chapter 13 bankruptcy for other reasons. For example, the debtor may need to protect property that would have otherwise been lost in a Chapter 7 or the debtor may need to catch up on past-due mortgage payments.

How long does the process take?

A Chapter 13 Bankruptcy process can take 3 to 5 years depending on whether the debtor is above or below the state median income. A Chapter 13 payment plan cannot exceed 5 years.  If the debtor is below the median income, a 3-year plan is possible. Such a debtor may opt for a longer plan anyway in order to reduce monthly payments. On the other hand, if the debtor is above the median income, then the plan is 5 years, unless he or she can pay the creditors in full sooner.

What is the cost of filing for Chapter 13 Bankruptcy?

The fee for a Chapter 13 Bankruptcy attorney is typically $4,100. A portion of the attorney fee can be paid through the Chapter 13 plan payments.

What Happens After Filing for Chapter 13 Bankruptcy?

In a Chapter 13 Bankruptcy, you are required to repay your creditors over a three to five year period. Priority debts, such as child support and alimony, are usually paid in full. Regular payments on secured debts are also typically required. Your disposable income will then be used to make payments on your unsecured debt to the extent that you are able to do so. A Chapter 13 repayment plan can be modified on the basis of hardship. It can also be converted to a Chapter 7 in some cases. Remaining unsecured debt will be eliminated after the payment plan is completed as long as you are current on child support and/or alimony obligations and you have completed a budget counseling course with an approved agency.

The professionals at the Law Office of Diane K. Bross are ready to assist you through every step of the process when filling for Chapter 13 bankruptcy.  For more information about filing for Chapter 7 or Chapter 13 bankruptcy, call the Law Office of Diane K. Bross at 719-634-7734 to speak with a Colorado Springs Bankruptcy Attorney today.

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