Chapter 13 Bankruptcy

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The attorneys at Long & Long have helped many people in the Denver metro area use Chapter 13 bankruptcy to take control of their debt situation and attain financial stability.

See if You Qualify for Chapter 13

Chapter 13 is meant for individuals who have a steady job, but significant debts. Filing for Chapter 13 allows individuals with regular income to pay part of their debts in installments over a three to five year period. It can also be an option for those who do not qualify for a Chapter 7 bankruptcy.

Chapter 13 is only available for individuals, so corporations and partnerships are unfortunately not eligible. There is one exception; however, self-employed individuals and those operating an unincorporated business are also allowed to file for Chapter 13.

If you are interested in Chapter 13, note that there are debt limits in the U.S. Bankruptcy Code– unfortunately you may not qualify if you owe too many obligations to creditors.

Under Chapter 13, you must file a plan with the court to repay your creditors all or part of the money that you owe them using your future earnings. These earnings can be wages from employment, self-employment income, Social Security and disability benefits, interest income, pension income and any other source that provides you with a steady income stream. The length of time you have to repay your debts ― from 36 to 60 months ― depends upon your projected income and other factors. Ultimately, the court must approve your plan before it can take effect.

The advantage of declaring Chapter 13 bankruptcy is that the debtor is able to force creditors (in a successful plan) to accept your terms. These terms may afford you relief from losing your home, risking an IRS or state taxing agency levy, wage garnishments, liens and other methods utilized by creditors to collect on debts. After completing the payments under your plan, all of your debts will be discharged (wiped out) except non-dischargeable debts, such as debts for domestic support obligations, most student loans and certain taxes.

Steps to Filing Chapter 13

If you decide to file for Chapter 13 bankruptcy, a bankruptcy lawyer from Long & Long will work with you to draft a repayment plan, which will be submitted to the Bankruptcy Court. After we file the plan, a bankruptcy trustee holds a creditor meeting to address creditor claims and your financial status.

The court then holds a confirmation hearing to determine whether the proposed repayment plan is acceptable or if changes need to be made.

Once your payment plan period begins, creditors are bound by the terms of the plan.

Protect Your Home

With the increase in home values, we are increasingly using Chapter 13 to keep clients’ homes. Your home may have equity beyond the $75,000 homestead exemption or $105,000 homestead exemption for seniors and disabled persons. A Chapter 13 bankruptcy can often be used to keep your house when your equity exceeds the homestead exemption amounts.

Contact Us To Learn More

At Long & Long, we are committed to helping our clients through the bankruptcy process, offering non-judgmental advice and working to make bankruptcy proceedings as comprehensible and stress-free as possible. For more information about your options under bankruptcy law, contact us for a free initial consultation―we will schedule an appointment with you right away.

Chapter 13 Bankruptcy FAQs

The bankruptcy lawyers at Long & Long P.C. are committed to helping clients in the Denver metro area overcome debt, creditor harassment and other financial difficulties. Here, we answer some frequently asked questions about Chapter 13 bankruptcy.

What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a full or partial repayment plan administered by the bankruptcy court. The debtor submits a plan for approval, and when the plan is approved, he or she makes monthly payments to the bankruptcy trustee. The trustee then makes payments to creditors in accordance with the terms of the plan. At the end of the repayment period, which may be from three to five years, any remaining unsecured, dischargeable debt may be discharged (wiped out) if all payments have been made according to the plan.
Who Can File for Chapter 13 Bankruptcy?
In one sense, it is easier to qualify for Chapter 13 bankruptcy than for Chapter 7. The “means test” does not disqualify you from filing a Chapter 13 bankruptcy and some debtors who cannot qualify for Chapter 7 bankruptcy decide to file under Chapter 13 instead. However, Chapter 13 bankruptcy requires a regular income that will allow you to create a budget and make predictable and reliable payments to the bankruptcy trustee.
How Does Declaring Chapter 13 Affect My Credit?
A bankruptcy will remain on your credit report for ten years. However, its affect on your credit rating diminishes rapidly. Further, you can obtain loans during the Chapter 13 with Trustee approval. Additionally, while you are in Chapter 13, you must obtain approval from the court before you incur new debt.
What Should I Bring to My Free Initial Consultation?

To file for Chapter 7 bankruptcy, you must qualify under the Chapter 7 means test. The means test first compares your income to the median income in Colorado. If your income is lower than Colorado’s median income, you can file for Chapter 7 bankruptcy. However, if your income is greater than the median income, other calculations regarding your income and allowable expenses are required to determine whether or not you can file for Chapter 7 bankruptcy.

What should I bring to my free initial consultation? When you come to meet with one of the attorneys at Long & Long P.C., please bring the following documents if available:

  • Paycheck stubs for you and your spouse (if married), including current month and last two months
  • Documents showing miscellaneous income received over the last seven months, including commissions or bonuses, child support or spousal support (alimony), gifts, unemployment, trust funds, inheritance, gambling winnings, Social Security payments, retirement payments, rents from tenants, interests and dividends, asset sales, etc.
  • Contributions received for living expenses from non-filing spouse (if married) or other household members over the last seven months
  • Statements for bank or credit union accounts, stock brokerage accounts or other similar accounts for the last two months
  • Bills, notices or letters received from creditors and/or collectors in the last three months for all your debts including notices of pending lawsuits, judgment liens, garnishments or foreclosures
  • Court orders for child support or spousal support, including current amounts or arrearages due and owing
  • Statements or bills for current monthly living expenses
  • Federal and state income tax returns for the last two years, including W-2s and 1099s for the most recent year
  • Recent credit report for each individual debtor
  • Documents regarding any bankruptcy you filed during the last eight years
  • For business debtors, balance sheets plus income and expense summary for the prior year ending and the last month of the current year
How Can I Learn More?
If you think Chapter 13 bankruptcy may be a good way for you to take control of your debt situation,contact Long & Long P.C. today to schedule a free initial consultation. We have offices in Downtown Denver and South Metro Areas, making us one of the most accessible bankruptcy law firms in the Denver metro area.

Client Reviews

Marty is absolutely compassionate, understanding and very upfront person. Very professional and EXCELLENT in what he does. When I ran out of options to keep up with our financial obligations during COVID 19...

George S.

Marty Long was able to navigate my difficult case and get me the best case scenario outcome. In addition, I am extremely pleased that there were no additional costs from the original estimate Marty gave to me...

Tony R.

Martin was extremely helpful with our bankruptcy. I pelted this guy with so many questions and had to have filled up his email a billion times and he helped me understand the process to feel confident in our...

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