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Bankruptcy
Chapter 13
HLA provides representation for both commercial and personal bankruptcies.
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Chapter 13 also involves a plan for repayment of debts, and it
is much more accessible than a Chapter
11. Just the same, not all debtors will qualify for Chapter
13 as they may lack the steady income necessary to fund a viable
Chapter 13 plan. Also, the limits for filing Chapter 13 are (1)
unsecured debts of less than $336,900.00, and (2) secured debts
of less than $1,010,650.00.
Under Chapter 13, the debtor proposes a plan to pay creditors
over a 3-5 year period. During this period, his creditors cannot
attempt to collect on the individual's previously incurred debt
except through the bankruptcy court. In general, the individual
gets to keep his property, and creditors end up with less money
than they are owed.
Advantages of Chapter 13 over Chapter 7
include a super discharge of certain debts not dischargeable
under Chapter 7, lien stripping, and
cram downs. In the context of foreclosures, these attributes
are particularly important since the debtor may ask the court to
cancel a second mortgage (“lien stripping”) and/or force a
principal reduction with respect to the home loan(s).
It is unlikely that a debtor will make best use of a Chapter 13
bankruptcy without the aid of an experienced bankruptcy
attorney. In some cases, the court will simply tell the debtor
to go get an attorney or face dismissal of the case. We
encourage you, therefore, to speak with an HLA attorney before
making any decisions regarding bankruptcy protection.
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| Quick Facts |
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Understand your rights
under the bankruptcy
code.
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Discuss your
circumstances with an
HLA attorney to
determine the
alternative that's right
for you.
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