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What is Chapter 13 Bankruptcy?

Know Your Options


Under a Chapter 13 Petition, a debtor is granted the right to reorganize their debts into one monthly payment. This differs from a Chapter 7, which is a complete discharge. While we believe that a majority of our clients should file a Chapter 7, a Chapter 13 is a good alternative for the right client.

Cutler & Associates Chapter 13

Like a Chapter 7,
a Chapter 13 does the following

Stop Foreclosure, Freeze Creditors

  • It stops foreclosures, provided the sheriff’s sale has not taken place
  • It places all creditors in a freeze, including, suits, calls, letters, garnishments
  • It will likely eliminate part of your unsecured debt (i.e. credit cards, medical bills)
Cutler & Associates Bankruptcy Attorneys

The requirements of a Chapter 13

are as follows

  • You must have a regular source of income and have enough disposable income to fund a Chapter 13 plan.
  • The plan is reviewed and must be approved by the Bankruptcy Court.
  • The amount of your plan payment is determined by several factors including the debtor’s regular and disposable income.
  • You must make plan payments to the Chapter 13 trustee, who collects the money paid by the debtor and disburses it to creditors in the manner called for in the plan.
  • Once you have completed your repayment plan and have attended money management classes, the debtor will be released of the liability of their dis-chargeable debts.

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for a free bankruptcy evaluation!