Attorney William D. Schroeder Jr. Introduces Guide to Chapter 13 Bankruptcy Proceedings

Those going through a difficult financial period may consider the option of filing for a chapter 13 bankruptcy. One of the leading reasons many Americans choose to file chapter 13 as opposed to other bankruptcy chapters under the law is that it enables debtors to protect their property assets during the filing and ensures only liquid assets are included within repayment plans. Before considering the chapter 13 filing process, however, debtors must ensure they fully understand the various elements involved. And so attorney William D. Schroeder Jr. has outlined the chapter 13 bankruptcy filing factors for all clients to review before going ahead with their case.

Chapter 13 Requires a Means Test

Under chapter 13 bankruptcy law, as with filing under many of the chapters, the debtor is now required to undergo a means test in order to analyze their ability to pay their debts as part of any court-approved payment plan. This means test will determine the disposable income of the debtor and form the basis of any payment plan.

A Payment Plan Will be Created

The chapter 13 payment plan is the process through which certain debts are paid to creditors. The law sets out the priority sequencing for the payment of debt and provides for the payment of claims such as mortgage arrears, child support, domestic support and tax debt to be processed before other debt owed to creditors. If the debtor has shown through a means test they are unable to pay above a certain amount, unsecured debts such as credit card debt might not be included within this payment plan.

A Trustee will be Appointed

A chapter 13 trustee is the debtor’s main point of contact with creditors and other stakeholders. This trustee is the legal specialist in charge of the payment plan and they will help decide whether the plan has been properly created considering all the available information on the debtor’s financial situation. If the plan is confirmed through the courts, this trustee will then be the person tasked with dispensing the assets to the creditors and the debtor will make all payments to the trustee in-keeping with the provisions of their payment plan.

The Debtor Must Abide by Certain Restrictions

As part of a chapter 13 bankruptcy filing, a debtor will be subject to specific restrictions on their finances. For example, they may not incur large amounts of debt during the proceedings, such as a mortgage or car loan. They must remain committed to their payment plan at all times. And only when all payments have been dispensed and the filing discharged will restrictions be lifted.
Working with a knowledgeable chapter 13 bankruptcy attorney can help debtors quickly resolve their financial challenges and move forward in their financial and private lives. To learn more about this process, speak with chapter 13 bankruptcy attorney William D. Schroeder Jr. directly about your personal options. He can be contacted by phone at 215-822-2728 or email at