Chapter 13 Bankruptcy involves working out a repayment plan with creditors. The purpose of Chapter 13 is to enable financially distressed individual debtors, under court supervision and protection, to propose and carry out a repayment plan under which creditors are paid over an extended period of time. The filing of the petition under Chapter 13 "automatically stays" most collection actions against the debtor or the debtor's property while a repayment plan is worked out under the supervision of the courts. As long as the "stay" is in effect, creditors generally cannot initiate or continue any lawsuits, wage garnishment, or even telephone calls demanding payments.

By virtue of the automatic stay, an individual debtor faced with a threatened foreclosure of the mortgage on his or her principal residence can prevent an immediate foreclosure by filing a Chapter 13 petition. Chapter 13 then affords the debtor a right to cure defaults on long-term home mortgage debts by bringing the payments current over a reasonable period of time. The debtor is permitted to cure a default with respect to a lien on the debtor's principal residence up until the completion of a foreclosure sale under state law. 11 U.S.C. § 1322(c).

Attorneys in our firm who practice in this field work with our clients to get them through Chapter 13 Bankruptcy. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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