Why a Chapter 13 Might Be Right for You?

A Chapter 13 bankruptcy can give you up to five years to rebuild your finances

Bankruptcy is never the first option. Many individuals will struggle for months or even years, dealing with mounting economic evidence that they are in over their heads and have no way to return to a solid financial footing.

Maybe you were injured at work and had only limited insurance. When that ran out, you were still unable to return to your job or could only work part-time, and you watched you bank balances drain away while your pile of past-due bills mounted.

Perhaps you were involved in a divorce last year. You now find that the income that supported one household is inadequate to deal with two. Or you are returning to work and have only been able to find low-wage, entry-level positions.

Many oil and gas workers in Texas are probably also feeling the pain as the decline in gas prices has led to a decline in virtually everything related to that industry.

No way out?

Any of these and dozens of other examples all can leave hard-working Texans facing an insurmountable mountain of debt. You could try to cobble together a couple of jobs and attempt to deal with that debt, but what if you already have and the debt is still rising faster than your attempts to pay down.

It may be time to speak with a bankruptcy attorney about a Chapter 13. With a well-structured Chapter 13 plan, you may be able to eliminate much of your unsecured debt, such as credit cards or medical bills and at the same time, manage to keep your vehicle and your home.

In danger of your vehicle being repossessed?

Your vehicle is essential to keeping the work you have found, and a bankruptcy may be able to allow you to make up missed payments or in some cases, allow you to reduce the actual amount you owe on the vehicle. Because a bankruptcy filing will stop all collection activity, it will prevent any attempt by a lender to repossess your vehicle and stop the incessant phone calls and demand letters from your creditors and collection agencies.

Threatened with foreclosure?

If you have a home with a mortgage like many Texans, financial troubles may have left you behind on your payments and facing a foreclosure action. In most cases, bankruptcy will stop the foreclosure, and a Chapter 13 will allow you to pay your mortgage arrears through the plan, which can give you up to five-years to make up those payments.

IRS problems?

The IRS can be one of the most difficult creditors you can deal with. Chapter 13 can help you restructure IRS debt, in some cases allowing you to discharge it altogether. Even if the tax debt is not subject to discharge, you can potentially save thousands of dollars by stopping the accrual of penalties and interest after the bankruptcy is filed.

Behind on child support?

The state attorney general has many available avenues to enforce collection of back child support ranging from garnishment to driver's license suspension to imprisonment. A Chapter 13 can get you back on track with your child support obligation by allowing you to put a halt to collection activity and allowing you up to five years to get caught up.


The Chapter 13 plan works like a 3- to 5-year debt restructure program, accounting for all of your necessary expenses, secured debts and unsecured debts. The plan is based your payment of disposable inco me towards your debts.

An experienced bankruptcy attorney, such as Patrick D. West, can help you develop and propose a plan that is most advantageous to you and assist in putting together a budget that has the best chance of achieving financial goals such as keeping your home and vehicles and allow you to pay your household expenses while maintaining any other necessary expenses, such as child support payments.

If you can maintain your payments under this plan for the three to five year period, you can successfully receive a discharge of credit cards, medical bills, payday loans and other unsecured debts while keeping your home and catching up any arrearages and retain your vehicles or even restructure the debts on the vehicles.

The advantage of the bankruptcy is that it provides clear guidance on how to extract yourself from your overwhelming debts and allows you get a fresh start on your economic health.