Vivian M. Williams & Associates, P.C.

Defending People's Rights & Freedoms




For Westchester Office Call


An Overview of Chapter 13 Bankruptcy

Chapter 13 bankruptcy is also referred to as the reorganization bankruptcy chapter. It allows a debtor to repay his or her debts over a period of three-five years at a rate that the debtor could afford. in  Chapter 13 Bankruptcy, the debtor may also be able to avoid paying ALL of his or debts. The debtor may however, be required to repay a 100% of some categories of debts.

In Chapter 13 bankruptcy the debtor gets to keep his or her assets such as a house and or other valuable personal property. You may also be able to keep your assets in a Chapter 7 Bankruptcy, however, the debtor should note that Chapter 7 Bankruptcy is a liquidation chapter and could lead to the loss of assets. Similarly a debtor with assets should NOT conclude that because he or she has assets a Chapter 13 Bankruptcy petition must be filed instead of a Chpater 7 Bankruptcy petition.

The decision of what bankruptcy chapter to file under requires careful analysis. It is strongly recommended that consult a competent bankruptcy attorney before filing bankruptcy.


Who is Eligible to File Chapter 13 Bankruptcy

Chapter 13 bankruptcy has eligibility requirements. If a debtor does NOT satisfy the eligibility requirements the Chapter 13 bankruptcy petition may be dismissed by the court or the bankruptcy court may force the debtor to convert the Chapter 13 Bankruptcy case to a Chapter 7 Bankruptcy case if the debtor satisfies the requirements for Chapter 7 Bankruptcy.

An important consideration for Chapter 13 Bankruptcy is the disposable income of the of the debtor. Disposable income is a term used in bankruptcy law to refer to a situation where a debtor has excess income after paying ALL of his or bills and living expenses. It is this disposable income that is used to make payments to creditors in the Chapter 13 Bankruptcy Plan. In other words, if you do NOT have any money leftover after paying your basic living expenses, the bankruptcy court would find that there is no sense in approving you for Chapter 13 Bankruptcy because you don't have the money to pay the creditors anyway.

Many people file bankruptcy then either have their bankruptcy case dismissed by the court or they voluntarily ask the court to dimiss their bankruptcy case. This usually happens becuase the debtor did NOT carefully analyze his or her situation before filing bankruptcy.  It is therefore, recommended that you consult a competetnt bankruptcy attorney before filing bankruptcy.