50 Main Street, Suite 1000, White Plains, NY 10606 CALL 914.206.9614

6739 Myers Road, East Syracuse, NY 13057 CALL 315.422.1234

How Does Chapter 13 Bankruptcy Work?

Our Onondaga and Westchester County Bankruptcy Attorney Can Help You Restructure Your Debt

Chapter 13
Imagine that you have a staggering amount of debt. Imagine further that you make a decent living, but not enough to get out of the problems you incurred before. You want to file bankruptcy, but you think you make too much money and you want to save your house and your car. What do you do? Our Onondaga and Westchester County bankruptcy attorney, Theodore Araujo, has the answers.


If you have enough disposable income to support your debt, a Chapter 13 case can help you reorganize and restructure that debt to make it manageable. In a Chapter 13 bankruptcy, you propose a plan to the court to repay your creditors in a specific way through a trustee. Chapter 13 can help with a number of problems, including:

  • Foreclosure. If you are in default on your mortgage and you are unable or unwilling to try your other foreclosure prevention options, a Chapter 13 bankruptcy can help. Bankruptcy can stop a foreclosure immediately, even if the foreclosure sale is occurring the next day or even later on the same day. Your Chapter 13 plan can propose to bring your mortgage current over the life of the plan.
  • Repossession. If you fear you may lose your car soon to repossession, a Chapter 13 can prevent your lender from taking the car. Even if your lender has already repossessed your car, you can get it back if you file Chapter 13 before the lender sells it. Your Chapter 13 plan will pay off the vehicle, and you leave your case with a clear title.
  • Income Taxes. Generally, income taxes are not dischargeable in a Chapter 7 bankruptcy. However, if you owe money to IRS or to your state treasury, a Chapter 13 plan can help you structure the payments to these creditors and prevent them from levying your property.
  • Second and Third Mortgages. Your home may be worth less than your first mortgage, but you still have a second or even a third mortgage on the property. In a Chapter 13 case, if your property is worth less than your first mortgage balance, you can strip the second and third mortgages and wipe them out like credit card debt.
  • A Lot of Debt, but Too Much Income. You may be drowning in debt, but you make too much money to file a Chapter 7. Chapter 13 is another option for lifting the debt burden and making your life easier.

If you have any of these problems or even think you may in the future, contact Onondaga and Westchester County bankruptcy lawyer Theodore Araujo at the Bankruptcy Law Center right away for a free consultation.