Leeds, AL—Individuals who are considering filing for bankruptcy in Alabama may have come across Chapter 13 bankruptcy as an option for them to consider. This type of bankruptcy is often used by individuals who earn a “regular income,” according to the U.S Bankruptcy Court Southern District of Alabama.

If an individual is interested in learning more about filing for Chapter 13 bankruptcy, they are encouraged to read on for answers to some of the most commonly asked questions regarding this type of bankruptcy. It would also benefit them to schedule an initial consultation with a Leeds, AL bankruptcy lawyer.


  • Why is Chapter 13 bankruptcy called the “wage earner’s plan?”

Chapter 13 bankruptcy is often referred to as the “wage earner’s plan” because it allows debtors (i.e those who file for bankruptcy) to pay some or all of their debt back over time. The amount they earn will determine (1) how much they have to pay back and (2) how long their repayment plan will last.


  • What are the different repayment plans that are offered through Chapter 13 bankruptcy?

A debtor may be required to make fixed payments for three consecutive years if their “current monthly income is less than the applicable state median.” If a debtor’s monthly income is “greater than the applicable state median,” then they must make payments for five years.


  • Who does a debtor make payments to?

Debtors who qualify for Chapter 13 bankruptcy will make payments to the trustee assigned to their case. These payments are usually made on a bi-weekly or monthly basis. The trustee is not only responsible for collecting these payments but also distributing the money to the debtor’s creditors.


  • Can businesses file for Chapter 13 bankruptcy?

Businesses that register as a corporation or partnership won’t qualify for Chapter 13 bankruptcy. However, those who identify as self-employed or operate an unincorporated business can take advantage of this type of bankruptcy.


  • Is property protected under Chapter 13 bankruptcy?

If a debtor files for Chapter 13 bankruptcy, their property such as their home is usually protected from being liquidated. In fact, Chapter 13 bankruptcy can even help a debtor maintain possession of their home if it went into foreclosure, according to the U.S. Bankruptcy Court Southern District of Alabama.


Need more information on filing for Chapter 13 bankruptcy?


If an individual is considering filing for Chapter 13 bankruptcy but needs more information, the Leeds, AL bankruptcy lawyers at Hill, Gossett, Kemp & Hufford, P.C. are here to provide it to them. Before an individual assumes they qualify for bankruptcy, they will want to have a bankruptcy lawyer assess their circumstances to determine if they would make for a good candidate.


Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.


Hill, Gossett, Kemp & Hufford, P.C. can be reached at:


Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com


Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500


Springville Office

6441 U.S. Highway 11

Springville, Alabama 35146

Phone: (205) 467-2225

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