In a Chapter 13 case, in addition to filing a petition which includes several schedules of assets and liabilities, you file a "plan" showing how you will pay off some of your past-due and current debts for a period of three (3) years. It can be up to five (5) years if you need more time. Here are some examples of when a Chapter 13 can help you.

• If you have valuable property, you can use Chapter 13 to protect your property from creditors which you cannot protect in Chapter 7.
   

• Some people utilize Chapter 13 bankruptcy filing to buy time. For example, if your property is about to be foreclosed on, you can file Chapter 13 bankruptcy papers to stop collection efforts, and then attempt to sell the property before the foreclosure.
   

• Chapter 13 is a very powerful, yet stringent, form of bankruptcy. Unlike Chapter 7, Chapter 13 can offer you more options in settling back taxes.
   

• A Chapter 13 filing does not exclude you from claiming Chapter 7 bankruptcy in the future. However, a Chapter 7 filing can prevent you from claiming Chapter 13 at a later date.
   

• A co-debtor is protected in Chapter 13.

Chapter 13 bankruptcy laws allow you to establish a payment plan for a portion of your debts. So, how much can you expect to pay?

(a) Calculate the total of your "nonexempt" property. Examples of EXEMPT property include necessary clothing, vehicles (up to $2,775), pensions, reasonable household furnishings, appliances, a percentage of the equity in your residence (percentages vary by state), and personal effects.

Unsecured creditors must receive at least the value of your nonexempt property in a Chapter 13 bankruptcy filing.

(b) Calculate a minimum of 10% of what you owe your unsecured creditors.

(c) Add the amount of MISSED payments owned to secured creditors, such as mortgage or auto payments.

(d) Add 10% of your subtotal to cover court fees, and filing charges.

(e) Divide the total by 36 months.

(f) Your total is approximately the amount you can expect to pay in each month in a Chapter 13 bankruptcy filing.


To determine whether a Chapter 13 Bankruptcy filing is the most appropriate legal solution to safeguarding your future, consult an experienced bankruptcy attorney.

Nothing can be more devastating or stressful than going through a financial crisis. We at Klein & Miller, LLP law offices can provide you with the peace of mind you deserve during this difficult time; and we have the expertise to achieve the results you deserve. As a client of Klein & Miller, you will receive expert and strategic advice required to make the important decisions that will affect your future.

Contact the Massachusetts Bankruptcy Lawyers of Klein & Miller to help you objectively review your situation, and if need be prepare your bankruptcy forms, attend meetings with your creditors and serve as your advocate with the judge, trustee and creditors.