Pennsylvania Chapter 13 Bankruptcy
PA debt reorganization lawyers
Chapter 13 is a particular section of the Bankruptcy Code that consumers use to address their outstanding debts especially when they are faced with a foreclosure proceeding against their residence or when they are faced with a potential repossession because of delinquent automobile loan payments. Under this particular form of bankruptcy an individual works closely with our attorneys to develop a proposed plan that outlines how much income he or she can dedicate to make the regular monthly payments on their outstanding secured debts, such as the mortgage and automobile loan, plus an additional amount that will be used to catch up on the dollar amount of the delinquent payments and the administration and other costs of the case. By the end of the Chapter 13 case the goal is to have made all of the regular monthly payments that were due during that time, plus any delinquent amounts will be paid off. Chapter 13 cases usually last three to five years based on the time that is needed to accomplish the goals set forth in most Chapter 13 cases.
Chapter 13 is a form of bankruptcy that is also used by individuals who are forced to use this particular type of bankruptcy based upon a complex income calculation required by the Bankruptcy Code.
In both situations, the payments will be made to the Trustee assigned to the case and the Trustee collects the funds and distributes the funds based upon priority and a percentage calculation. The benefit is the same as that of a Chapter 7 case with the exception that unsecured creditors will typically receive some cash distribution from the Chapter 13 Trustee. Any remaining debt balance that the Trustee does not pay is discharged at the end of the case.
In addition, individuals filing for relief under this Chapter must complete a course from an approved nonprofit budget and credit counseling agency before the bankruptcy case is filed. Then, no later than the date when the last Plan payment is due, individuals must file their certification of completion of an instructional course concerning personal financial management provided by an approved agency.