If Successful, a Chapter 13 Bankruptcy will require your creditors to take less money monthly over a three to five year period. A Chapter 13 Bankruptcy carries the full force of the United States Government behind it. Banks, credit card companies, debt collectors and the like, clearly understand that your Chapter 13 Bankruptcy provides you with the government’s protection and the harassing phone calls and other harassing tactics they have been using to try and collect their debt will stop as soon as they are aware that you have filed for Chapter 13 Bankruptcy protection. If they don’t stop they may very well have to answer to the court as to why they didn’t.

When your Chapter 13 Bankruptcy is filed it will put a stop to:

• foreclosure actions;
• wage garnishments
• reposession of you car;
• late charges;
• interest and penalties on credit card accounts, taxes, and other loans;
• harassment for back child support.

Simply stated, a Chapter 13 Bankruptcy has the power to change your life. You can take almost everyone of your current bills and consolidate them into one low monthly payment and in most circumstances your creditors are powerless to do anything about it. They must accept your court ordered payment plan whether they like it or not.

The filing of the Chapter 13 petition must be accompanied by a proposed payment plan extending up to five years. The proposed payment plan must provide for the payment of all priority claims, such as taxes, in full. All tax returns for the four years prior to filing must be filed.

The court will apply living standards set by IRS regulations to determine what is reasonable for you to pay for living expenses, including housing and food, to find out how much you have available to pay your debts.

The bankruptcy trustee appointed by the Bankruptcy Court must review the proposed plan for accuracy and feasibility. The proposed plan is distributed to creditors, who have the right to object to the plan if it’s unreasonable. If the plan is approved, you can keep all your assets during the period of the plan. You make monthly payments to the bankruptcy trustee, who distributes the funds to the creditors according to the plan. If the plan is completed as approved, your unpaid debts are discharged.