What is Chapter 13?

Chapter 13 is a type of reorganization for individuals.  It is sometimes called “Debtor’s Court” or a “Wage Earner’s Plan.”  Chapter 13 offers individuals a way to repay all or a portion of the monies they owe.  Payments are based on the amount of the debtor’s disposable income and the value of the debtor’s non-exempt assets.  A debtor’s disposable income is the amount of money the debtor has left after the payment of basic living expenses.  In Chapter 13, you make a regular payment to the Chapter 13 trustee who then distributes money to your creditors on a monthly basis. The amount you pay to the trustee is based on two things. First, you must pay into your Chapter 13 case the total amount of your monthly disposable income times 36. Your disposable income is the amount of money you have left each month after paying your basic living expenses. Second, you must make sure that your creditors receive as much through the Chapter 13 case as they would have received through a Chapter 7 case. This basically means that you must pay the greater of (a) your disposable income times 36, or (b) the value of the equity in your property. As with a Chapter 7 case, the value of your equity is the amount the creditors would realize taking out your exemptions, the costs of sale, and the administration expenses. If you have no equity, your payment is based solely on your disposable income.

Who can file a Chapter 13 bankruptcy case?

Only individuals with stable, regular income are eligible to file a Chapter 13 bankruptcy case.  In addition, the debtor cannot have more than $1,010,650 in secured debt and $336,900 in unsecured debt.

What does it cost to file a Chapter 13 bankruptcy case?

Fees in most Chapter 13 cases range from $2100 to $2500. In many cases, your attorney fee can be paid as part of your Chapter 13 case. Prior to the filing of your case, we ask that you pay a minimum of $210. The $210 covers expenses including your pre-bankruptcy counseling, your post bankruptcy debtor education, and your credit check. Depending on the complexity of your case, a larger prepaid fee may be requested. We will work with you to arrive at a fee that is fair and within your ability to pay. Chapter 13 fees must be approved by the Bankruptcy Court and the fees we charge are comparable to those charged by other attorneys practicing in our area.  In addition to the attorney fee, you will have to pay the Court $274.00 as the filing fee for your case.  This expense can usually be paid over time through your plan.

Our Birmingham and Tuscaloosa bankruptcy lawyers can explain all of your options to you. You will not be pressured to hire Dionne & Dionne, or file a bankruptcy case. Our Birmingham and Tuscaloosa bankruptcy lawyers will explain your options to you for free.

How to Get Help and Get Out of Debt

When you are ready to get out from under your crushing debt, give Don or Melinda Dionne a call at 205-349-5911 (Tuscaloosa) or 205-453-1012 (Birmingham) or click here.  When you call, tell our assistant, Ginny, that you are a website reader and she will set you up with a free, no obligation, consultation to see how Don and Melinda can help you start living again.

Tuscaloosa Office: 9217 Old Greensboro Road, Tuscaloosa, Alabama 35405 (205) 349-5911; Birmingham Office: 4 Office Park Circle, Suite 214, Birmingham, Alabama 35223 (205) 453-1012.