When clients come in to my office and I discuss Chapter 13 a common question I get is "if I file Chapter 13 I have to pay everyone back, right?" The short answer to this question is "probably not."
Our firm files a lot of Chapter 13 cases in Oregon. It is fairly rare that our Chapter 13 clients are required to pay back all of their debt in Chapter 13. There are several factors that go into calculating a monthly Chapter 13 payment, including: a debtor's income, expenses, amount of non-exempt assets, amount of secured and priority debt, and many more.
In some cases a client can reorganize secured debt and at the same time get protection from unsecured creditors. I commonly have clients who enter into Chapter 13 and are able to propose a payment that is less than what their current car payments are. And, the car loans can be restructured and be included in the Chapter 13.
For example, a client could have a car payment of $500/mo and also have $30,000 in credit card debt. It may be possible for this person to file Chapter 13 and restructure the car loan and end up paying $400/mo in their case and be able to keep the car and get protection from the credit card debt.
If you are experiencing overwhelming debt, and could possibly benefit from a Chapter 13 you should seek the advice of an experienced Chapter 13 attorney.
More information about Chapter 13 in Oregon and bankruptcy in general can be found at our website: www.pacificbankruptcy.com.