Chapter 13 Bankruptcy
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Chapter 13 Bankruptcy Evaluation is the chapter of the United States Bankruptcy Code allowing a person’s earning to be collected by a trustee and paid to creditors by means of a court-approved debt-repayment plan, if the person has a regular income.
Chapter 13 Bankruptcy is also referred to as the wage earner plan or the income based plan. The debtor is allowed to propose a plan of rehabilitation to extend or reduce any balance of obligations, and to receive a discharge from unsecured debts after completing his payments.
When someone files for bankruptcy under Chapter 13 Bankruptcy Evaluation, their aim is to have the opportunity to repay some or all the debts in their name, in better terms, lower or no interest. On the other hand, Chapter 7 liquidates the debtor’s assets in order to redistribute and pay off the creditors. As compared to chapter 13, obtaining a mortgage after bankruptcy with chapter 7 is a bit more difficult.
The individual must have a regular income in order to be allowed to file for Chapter 13 Bankruptcy. The United States Bankruptcy Code gives the debtor a ceiling of 5 years, within which the creditors must be paid back. The entire process is carried out in the supervision of the courts, although the interests are safeguarded by the attorneys.
Listed below are the steps required to file Chapter 13 Bankruptcy:
- Prepare a budget, and determine if Chapter 13 Bankruptcy is right for you.
- Figure out of there are other ways to tackle your debt problems before filing for Chapter 13 Bankruptcy.
- Determine and implement methods of dealing with secured creditors.
- Devise a Chapter 13 Bankruptcy Evaluation plan, and fill out the forms.
- Pay the filing fee and complete the process of filing the forms and pleadings.
- Be sure to be on time when required to attend with the creditors and the court hearings.
- Obtain a discharge once the payments have all been made.
The full discharge options is a major advantage for Chapter 13 Bankruptcy Evaluation, as compared to Chapter 7. For example, if a debtor manages to complete all necessary payments in the plan, he or she is given a full plan discharge. In addition, another advantage of Chapter 13 Bankruptcy Evaluation is that a repayment can be created even if creditors disagree with it, as long as it is approved by the Court.