Idaho Falls Chapter 13 Bankruptcy Attorneys

Guiding Idaho Residents Through Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as a “reorganization” bankruptcy, is an option for debtors who have the ability to repay a portion of their debt. Unlike Chapter 7, which wipes out most debts and assets, Chapter 13 involves a repayment plan that lasts between 3 to 5 years.

The length of the repayment plan depends on how much debt the debtor has. In most cases, debtors must pay some portion of their debt and keep up with their regular monthly payments. However, in Chapter 13, the court can allow the debtor to skip certain payments if the debtor does not have the ability to pay.

Are you behind on your taxes? Contact us online or by calling (208) 271-4403 for help filing Chapter 13 bankruptcy.

How Much Debt Can You Repay in Chapter 13?

The amount of debt you can repay in a Chapter 13 bankruptcy is determined by a calculation called the "means test." The means test is based on your income and expenses.

If your disposable income is less than the median income for a similar household in your state, you will be allowed to repay all of your unsecured debt, including credit card debt, medical bills, and personal loans. If your disposable income is higher than the median income, you will be able to repay some, but not all, of your unsecured debt.

You will not be able to repay any of your secured debt, such as a mortgage or car loan, in a Chapter 13 bankruptcy. Instead, you will be directed to make payments to a trustee who will sell the secured property and use the proceeds to pay back the creditor.

Benefits of Chapter 13 Bankruptcy

Chapter 13 bankruptcy can be a valuable tool for individuals looking to restructure their debts and regain financial stability. By creating a manageable repayment plan, Chapter 13 allows you to keep your assets while gradually paying off your debts over a period of three to five years.

Some key benefits of Chapter 13 bankruptcy include:

Protection from creditor harassment
Ability to keep your home and other assets
Opportunity to catch up on missed mortgage or car payments
Prevention of foreclosure or repossession
Ability to discharge certain debts not eligible for discharge in Chapter 7 bankruptcy

Our Idaho Falls Chapter 13 bankruptcy attorneys at Tolson & Wayment are here to guide you through the process and help you achieve a fresh financial start.

What Is the Purpose of the Means Test?

The purpose of the means test is to prevent debtors from paying back more debt than they can afford. If a debtor earns too much, they will not be allowed to repay all of their unsecured debt. If a debtor earns too little, they will be allowed to repay all of their unsecured debt. In either case, the debtor will be able to repay some, but not all, of their unsecured debt.

When determining whether a debtor can afford to repay all of their unsecured debt, the means test takes into account the debtor's income, expenses, and property owned. The means test is based on the debtor's current income and expenses, not what their income and expenses were when they fell behind on their debt.

Why Choose Tolson & Wayment?

Our Idaho Falls Chapter 13 bankruptcy lawyers at Tolson & Wayment can help you determine if you are eligible to repay all of your debt or only a portion of it. We can also help you determine if you can keep your home or car. We are committed to helping you get the most out of your bankruptcy.

Call (208) 271-4403 to schedule your free initial consultation with our Idaho Falls Chapter 13 bankruptcy attorneys.

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