Manage Unmanageable Debt Problems with Chapter 13 Bankruptcy
Whereas Chapter 7 bankruptcy is designed to completely discharge most forms of consumer debt, Chapter 13 bankruptcy allows you to repay a portion of your debts gradually through a debt repayment plan. The length of the repayment plan is typically three to five years.
After the successful completion of your debt repayment plan, the court will discharge any remaining unsecured debts that you are unable to repay (as determined by the court), which are dischargeable under the U.S. Bankruptcy Code. As a result, most debtors are able to discharge a significant portion of their debts, including credit card debts, medical bills and other forms of unsecured debts.
In addition, Chapter 13 debtors who are upside down on their home mortgages can often strip their second mortgage and/or Home Equity Lines of Credit (HELOC) liens off of their homes. When this is done, the Court discharges the remaining amount of debt on those loans upon the debtor receiving their Chapter 13 discharge. When this occurs, debtors frequently regain equity in their homes for no other reason than the balance of their outstanding second mortgage and/or HELOC loans has been discharged by the Court.
To learn more about Chapter 13 bankruptcy, contact The Dodds Law Firm in Surprise, Arizona. Our attorneys are pleased to offer a consultation to answer your questions and help you determine if bankruptcy is right for you.