In an effort to prevent spam, please enter the security code shown below:

Chapter 13 Bankruptcy



Chapter 13 Bankruptcy is a payment plan and is commonly used to stay mortgage foreclosure or lower overall monthly expenses. A Chapter 13 Plan is filed with the court and later confirmed allowing the Petitioner to repay mortgage arrears or only cents on the dollar of their unsecured debts (credit cards, medical bills, personal loans, collection accounts, and certain tax obligation, among others). A Petitioner usually qualifies for Chapter 13 Bankruptcy protection based on equity in real estate (house) or based on higher income qualifications, as discussed below.

Chapter 13 Bankruptcy Case – Scenario 1

Clients often come into my law office and say “I own a home so I have to file a Chapter 13 Bankruptcy.” This is not the case since there are many exceptions in Bankruptcy Law. Under The Bankruptcy Code Section 11 U.S.C. 522(d)(1) each owner of the home is entitled to an exemption of $20,200. For example, real property with two owners and a mortgage(s) totaling $100,000 must be worth over $140,400.00 for the Petitioners to file for Chapter 13 Bankruptcy repayment plan. Otherwise, a Chapter 7 Bankruptcy discharge may be a more viable option. The bankrupty attorneys at Sadek Law Offices, LLC conducts free internet appraisals of real property during the free initial consultation to determine whether a Chapter 13 Bankruptcy is your best option.

Chapter 13 Bankruptcy Case – Scenario 2

In addition to the above, Chapter 13 Bankruptcy may be an option based on income. Even if a Petitioner filing bankruptcy does not own a home, they may file a Chapter 13 Bankruptcy based on what they can afford to pay their creditors per month, rather than what they owe. The Standards in Chapter 13 Bankruptcy are known as “means testing” and mirror the IRS collection standards and most often Petitioners in Chapter 13 Bankruptcy enjoy a tremendous monthly savings on their debts. Because the Petitioner is usually saving money on a monthly basis, they are able to enjoy an increased amount of disposable income. Chapter 13 Bankruptcy also leads to a higher credit score due to an improved debt to income ratio, and therefore better credit terms for you and your family.

The Chapter 13 bankruptcy attorneys at Sadek Law Offices are here to help

Chapter 13 Bankruptcy may be appear confusing, however, the bankruptcy attorneys at Sadek Law Offices, LLC specialize in Bankruptcy Law, with free consultations and reviews of your financial situation to determine a Chapter 13 Bankruptcy Law strategy for you.

If you have any questions regarding Chapter 13 Bankruptcy and your legal situation, call the bankruptcy attorneys and lawyers at Sadek Law Offices, LLC. We offer a FREE and confidential consultation with one of our Chapter 13 bankruptcy attorney in our Philadelphia law office to further discuss Chapter 13 Bankruptcy.