* Not Certified By The Texas Board Of Legal Specialization

Bankruptcy, Chapter 13

Filing Chapter 13 bankruptcy is for people who have some discretionary income after their normal and usual monthly expenses are deducted from their normal monthly income. For this reason, a Chapter 13 is called a "Wage Earner Bankruptcy"

Sixty (60) Monthly Payments

The big difference between Chapter 7 bankruptcy and bankruptcy, chapter 13, is that there are monthly payment plans created for the chapter 13 debtor. Payments must be made to the Chapter 13 trustee for an maximum time period of five years

How are the  payments applied? In a Chapter 13, the Trustee generally pays your creditors according to their classification.

 Secured creditors (i.e. arrearages to mortgage companies; vehicle lien holders; security interests to big ticket furniture items; etc.) get paid first;  Priority creditors (i.e. taxes, child support arrearages, etc.) get paid after or along with secured creditors, .    Unsecured creditors (i.e. most credit card debt; medical bills, etc.) get paid after secured and priority creditors are paid in full for the remaining life of the plan until either paid in full or the 60 months of payments have been completed.                                                   

This is a good way to stop foreclosure and save your house, as well as stop creditor harassment. And of course, all the Texas bankruptcy exemptions still apply, so you can usually keep all of your belongings.

Wage Earner Bankruptcy

Chapter 13 of the Bankruptcy Code is designed to enable individual debtors under Court protection and supervision to apply a portion of future earnings to the payment of a portion of their debts over an extended period of time. The debtor is protected from creditors by an automatic stay while a plan of repayment is developed and carried out. It is similar to a Chapter 11 Business Reorganization. In fact, Chapter 13 is sometimes called "Consumer Debt Adjustment."

Chapter 13 was intended to give the wage earner a reasonable opportunity to arrange installment payments out of future income so that creditors would receive more money than they otherwise would receive in liquidation.

You're going to want a skilled San Antonio bankruptcy attorney to help you so you can make your payment plan no more than you can afford for your Chapter 13.