Chapter 13
As in the case of a chapter 11, a chapter 13 allows the debtor to pay his or her creditors over time through a plan. The plan can go a maximum of 5 years, and must pay creditors what they would have received in a chapter 7. There is also a requirement that if creditors are not being paid in full, the debtor must be fully using his or her disposable income to fund the plan. Plan payments are made to a chapter 13 trustee, who then pays the creditors pursuant to the plan. Use of a chapter 13 is limited to individuals with regular income. Also a debtor can not qualify for a 13 if he or she has more than $250,000 unsecured debt or $750,000 secured debt. As discussed more fully below, the discharge provisions of a chapter 13 are broader than a chapter 7 and individual 11.
Bluestein & Muhlbauer, P.C.
333 International Drive
Williamsville, NY 14221
716.633.3200
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