Bryan P. Keenan & Associates, P.C.
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Bryan P. Keenan

How can I ensure a successful Chapter 13 bankruptcy?

For Pittsburgh residents who feel as if they are drowning in debt, Chapter 13 bankruptcy might seem like an ideal strategy to get on stronger financial ground. This is undoubtedly true if the debtor takes the necessary steps to ensure the plan's success. Failure to follow through on the terms of the Chapter 13 could lead to its dismissal. To avoid this, knowing how to make the plan work is key.

Unlike a Chapter 7 liquidation where the case is essentially over once the trustee approves it and the debts are discharged, the tradeoff for retaining a home or a car through Chapter 13 is that the debtor makes certain payments to a trustee who will then distribute payments to the creditors. It is imperative that debtors understand that Chapter 13 is a commitment to make certain payments for three or five years. In general, the duration of the payments will be five years and the debtor will have a predetermined amount that must be paid.

The debtor and the creditor will be linked for the duration of the plan. After the plan has been confirmed, the debtor must adhere to it. This involves making the payments either by sending them to the trustee or via payroll deduction. The debtor will need to live on a budget until the case is completed. The debtor cannot accrue new debt during the process unless they first consult with the trustee. With payroll deduction, the debtor need not worry about the payments, as they will go straight to the trustee. If a debtor does not follow the plan, then the case could be converted to a Chapter 7 liquidation and the property will be taken and sold to pay the creditors.

When a debtor is deciding whether bankruptcy is a viable option, it is wise to have legal advice from the beginning to formulate a comprehensive plan to complete the process. A law firm that helps people with their debt and understands Chapter 13 bankruptcy and other alternatives must be contacted for guidance before taking the next step.

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Bryan P. Keenan & Associates, P.C.

993 Greentree Road
Suite 101
Pittsburgh, PA 15220

Phone: 412-923-4941
Fax: 412-444-0158
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