What is a Chapter 13 bankruptcy? Who may be eligible? What are the requirements? How can an attorney help you? How much will it cost? This guide on Chapter 13 bankruptcy in Philadelphia can help you answer those questions.
Chapter 13 in Philadelphia is the most common type of bankruptcy filed in this state. Chapter 13 introduces many changes to a pre-existing repayment plan that allows debtors to re-organize their debts with reduced interest rates or reduced balances, or both.
Before we get into the nitty-gritty of Chapter 13 in Philadelphia, it is important to note that this type of bankruptcy will come with implications such as how it affects your credit. The ramifications you could face depend on many factors, including:
Chapter 13 of the Bankruptcy Act is a repayment plan that allows debtors to repay some or all of their debts according to a payment plan tailored to their capability. In Philadelphia, a debtor needs to file a repayment plan with the court if they owe secured debts that exceed $922,200 or unsecured debts that are greater than $394,725.
Chapter 13 is an important process for all parties involved. For the debtor, it will result in a lowered interest rate on debts. It may also lead to reduced balances or even complete dismissal of certain debts. For creditors this process is equally significant; they can expect their debtors to make agreed-upon monthly payments that are not too high and which would enable them to repay their debts in a timely manner.
To qualify for Chapter 13 in PA, you must:
The rules for Chapter 13 bankruptcy in Philadelphia are similar to a bankruptcy under Chapter 7 or Chapter 11. For example, they require that:
In a Chapter 13 bankruptcy, a lawyer can help you tailor a repayment plan that best suits your situation. They can fight for your rights and keep your interests at top of mind. The most common types of repayment plans under Chapter 13 are five-year payment plans and three-year payment plans:
While there may be certain benefits to filing for Chapter 13 bankruptcy under PA law, it can also have its disadvantages. This is why it can be so important to speak to a knowledgeable attorney. You can find a qualified bankruptcy law firm by searching online for “Chapter 13 attorney near me.”