A Chapter 13 debt relief process is designed for an individual who has a regular source of income. Chapter 13 allows the debtor to propose a “plan” to repay creditors over time – usually three to five years. This is a great option for someone who may not be able to qualify for a Chapter 7 bankruptcy based on income limitations. For example, a family of 4 making $120,000 a year but having $100,000 in credit card debt may not qualify for Chapter 7 to eliminate all debts without having to make payments. Under bankruptcy laws, this family makes too much money to qualify.

However, this family will qualify for a chapter 13 and may be able to reduce credit card debt from $100,000 to $20,000, to be paid in a chapter 13 over 5 years at 0% interest. This will translate in substantial credit card debt reduction and savings. This is just an example, and the percentage that this family will end up paying will vary on a case by case basis. The main variables in determining the percentage of debt that someone may have to pay in a chapter 13 depends mainly on income and household expenses. If you are struggling with credit card debt even with relatively good income, then Chapter 13 debt relief may be a great option. Call Blanco Law Bankruptcy to obtain a free chapter 13 payment plan calculation.