Chapter 13 bankruptcy is a form of bankruptcy that individuals can use to restructure their debts. Chapter 13 involves altering the payment terms of existing debts so that they can be paid off using the current income of the debtor. The income of the individual must be high enough to prove that sufficient debt payments can be made.Nano: An Overview of Chapter 13 Bankruptcy Chapter 13 bankruptcy allows for lower interest options and eliminates pressure from debt collectors.BankruptcyHome: Chapter 13 Bankruptcy A typical repayment plan is 30 to 60 months.TotalBankruptcy: Chapter 13 Bankruptcy Chapter 13 bankruptcy is different from Chapter 7 in that creditors are usually repaid as opposed to simply being blocked from collecting on outstanding debt.
The debtor is required to file a petition with the bankruptcy court, when filing for Chapter 13 bankruptcy. After the petition is filed, they will have 15 days to file a repayment plan. This plan must include the fixed amount of the payments that will be paid to the trustee on a regular basis, usually every other week, or once a month. The court must approve the plan before the payments can begin.http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html The repayment plan normally lasts from three to five years depending on your income and how much you can pay.http://www.nolo.com/legal-encyclopedia/article-30099.html
Chapter 13 Advantages
Filing Chapter 13 bankruptcy will halt foreclosure proceedings. The missed mortgage payments can be caught up, but current payments will still need to be paid on time.http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html Chapter 13 is similar to a consolidation loan, because the planned payment will be paid to a Chapter 13 trustee. The trustee then takes the payment and distributes it to the individual creditors.http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/chapter13.html
Chapter 13 Bankruptcy Information: Overview of Chapter 13 - FindLaw
This video talks about the difference between Chapter 7 and Chapter 13 bankruptcy in just one minute and thirty one seconds. The most obvious difference is that Chapter 13 sees you repay most of your creditors over time, while chapter 7 makes them simply go away.
Disclaimer
The content on this page is not a substitute for legal advice. Consult a legal professional before filing for Chapter 13 bankruptcy.
References
Fast Facts
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Secured debts cannot exceed $1,081,400
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Unsecured debts cannot exceed $360,475
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