To decide whether Chapter 13 bankruptcy is right for you, it is important to understand the basic concepts behind this type of bankruptcy.

Unlike other types of bankruptcies that eradicate most of your debts, Chapter 13 bankruptcy will require you to create a restructurement plan. You will need to present to the court a plan by which you can repay your debts over a longer period of time, usually three to five years. In order to accomplish this, the court will eliminate or reduce interest on some of your payments, so that your monthly payments will be reduced.

Should you successfully complete the terms of your bankruptcy over the next three to five years, your remaining debts will be discharged. Before you create your repayment plan, you must first file a petition for Chapter 13 bankruptcy. In this document you will need to outline your current finances, including debts, assets, expenses and income. You will also be asked to complete a course of credit counseling before filing for bankruptcy.

If you're thinking about Chapter 13, we encourage you tocontact our firm and speak with a Houston bankruptcy lawyer today.