Chapter 13: Debt Consolidation

Chapter 13 involves making payments to your creditors over a period of time to repay at least a portion of your debt. The reason to choose a Chapter 13 Plan over the sort of debt consolidation plan you hear about on the radio is that: your creditors are obligated to accept the amount the Court determines you can pay; unsecured creditors, such as credit cards, are generally not entitled to interest under the bankruptcy plan; and all collection activity, garnishments, phone calls, lawsuits and such, is halted by the bankruptcy filing.

The are a number of reasons why you might want to file a Chapter 13 rather than a Chapter 7. They include setting up a Plan to let you bring your home mortgage current and stop a foreclosure. In some cases Chapter 13 may allow you to eliminate - 'strip' - your second mortgage and discharge it along with credit card and other unsecured debt at the end of the bankruptcy.

Filing Chapter 13 will allow you to reinstate a suspended driver's license by setting up a repayment plan on traffic tickets. It can also be used to manage tax debt or child support arrears.

Some people file Chapter 13 because they need to get relief from creditors, but have too much income or assets to be able to file Chapter 7. The calculation to determine whether your income exceeds the amount which would allow you to file Chapter 7 is complex. As part of your initial consultation, we will generally be able to tell if this is an issue in your case.

Chapter 13 is the most common type of bankruptcy repayment plan. There are other types, the most common of which is a Chapter 11. Chapter 11 is mostly done by corporations. You have to be a human type person to file Chapter 13. But there is a limit to the amount of debt you can have and file a Chapter 13, so people who have too much debt, currently in excess of $1,300,000, can only file Chapter 11 (or 7 if they are prepared to have the Court liquidate assets). Chapter 11s tend to be very expensive and require you to provide a great deal more ongoing financial information to the court than in other types of bankruptcy cases.

I provide free consultations to potential clients who are considering bankruptcy to help them decide whether bankruptcy is the best option for them, and if so which type will work best for their personal situation and goals. Just call me at (425) 255-5535 to set up an appointment or ask any questions. We are conveniently located near the intersection of I-405 and state route 167 in Renton, about two miles east of Southcenter Mall.

This is a small office, so you will sometimes reach our voicemail. We will get back to you as soon as we can.

In order to help our clients who are trying to minimize travel and contacts during the COVID-19 outbreak, we are temporarily offering initial consultations by telephone as well as in-person. Because the telephone consultation can run up to an hour or more, you will still need to make an appointment in advance. Please contact us for details.

We also ask that all of our clients reschedule any in-person appointments if you have any symptoms or believe you may have been exposed to the coronavirus.


I am a debt relief agency under the terms of the Bankruptcy Code. I help people file for bankruptcy relief under that Code.

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