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How does Chapter 13 work?

June 29, 2022

By Diane Drain Attorney & Retired Law Professor

In Arizona, persons who pursue their chapter 13 case without an attorney have a failure rate of at least 98 percent.

Petition, Schedules, Statements of Affairs, and other documents are filed with the Bankruptcy Court by the debtors. The Chapter 13 Trustee and other creditors examine these documents. The Debtors also file a Plan of Reorganization in addition to the documents. The plan is for the Debtors to pay all of their disposable income (income minus allowed expenses-some trustees have expense guidelines and Census Bureau and IRS data) to their creditors through the Bankruptcy Trustee over the next 3 to 5 years. Unless their debts are non-dischargeable, their remaining debts will be discharged at the end of their Plan period.

Chapter 13 varies greatly from district to district, based on local customs and opinions regarding what is “fair” and in “good faith” as determined by trustees and judges. A successful Chapter 13 case always requires the assistance of an experienced bankruptcy attorney who is knowledgeable with the district’s prevailing court attitudes as well as the plethora of unwritten local norms.

Bradley’s Bankruptcy Basics – Chapter 13 Bankruptcy (this takes you to another website)

By |Published On: June 29th, 2022|Last Updated: July 28th, 2022|

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About the Author: Diane Drain

Diane L. Drain - Bankruptcy LawyerDiane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

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