Chapter 13 Bankruptcy


Southern Utah Chapter 13 Bankruptcy Attorney


Chapter 13 bankruptcy, sometimes called a reorganization bankruptcy, differs from Chapter 7 in that a debtor will be allowed to keep most of his assets in exchange for creating and abiding by a three or five-year payment plan.  The bankruptcy Trustee oversees the plan and distributes a portion of the payments to each of the debtor’s creditors.  After the plan is successfully completed, any remaining debt will be discharged.

To qualify for a Chapter 13 bankruptcy, a debtor must have a current income, and his combined debt must not exceed a certain limit.  As the Chapter 7, the Chapter 13 begins by filing a petition with schedules detailing the debtor’s debts, income, assets, exemptions, and expenses.  A plan is then formulated to determine how much the debtor must pay each month.

Other than the payment plan, the Chapter 13 process is very similar to the Chapter 7 process once the debtor’s petition is filed. Review the Chapter 7 process by clicking here.

The Chapter 13 bankruptcy is just as complex as the Chapter 7, if not more so as it extends over several years before a discharge is granted.  The attorneys at Ruesch & Reeve PLLC have helped debtors in all types of situations traverse the necessary paperwork and successfully negotiate a discharge.  If you believe you can benefit from bankruptcy protection, please contact our office for an initial consultation to discuss your specific case.

Benefits of a Chapter 13 Reorganization

A Chapter 13 reorganization may offer a debtor certain benefits over a Chapter 7 liquidation. Under Chapter 13, you may be able to:

  • Save your home from foreclosure
  • Keep your company’s doors open while you restructure and repay debt
  • Reschedule and lower payments on secured debts
  • Protect third parties who are also liable for your debt
  • Avoid any and all contact with creditors

Each individual or business seeking bankruptcy protection will have different concerns and long-term goals, and that is why it is so important to consider all of your options before you file. Take the first step and arrange a confidential consultation with a seasoned Utah Chapter 13 bankruptcy attorney at Ruesch & Reeve PLLC. Call today and see what we can do for you.  

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Bankruptcy Myths

With new laws it's not worth it to file for bankruptcy

False. The new law effective October 2005 allows you to quality for a Chapter 7 bankruptcy if your household income is less than your state’s median, or if you pass a “Means Test” to see if you have qualifying, low disposable income.

I have to have a large amount of debt before qualifying for bankruptcy

False. The question to ask is, “Is my debt load overwhelming compared to the amount of disposable income I currently have?”

I will lose everything I own including my car and home

False. Every state has exemptions which allow you to keep bare necessities. Insert link to info below in red. A place to live and a way to drive to work could be considered bare necessities.

It will take at least seven to ten years for my credit to recover from bankruptcy

False. Even with a bankruptcy showing for up to ten years, you can begin to build credit immediately after filing. The national average shows credit can be recovered in as little as eighteen months.

Everyone will think I'm a bad person if I file for bankruptcy

False. Someone must specifically be searching for your bankruptcy to find it in the public record. Always remember that bankruptcy provides relief. It is not a punishment demanded by your creditors. Law makers enacted laws to allow people to financially have a fresh start.

After I file for bankruptcy creditors can still garnish my wages

False. In Chapter 7 bankruptcies any wages you earn after the filing are yours to keep. Chapter 13 bankruptcy includes a pre-approved plan to pay off debt over a specific amount of time. In this case part of your earnings will be applied to your debts.