Sometimes, an individual with a regular income can not fulfill their commitments. Your debts can be overwhelming and, by far, beyond your earnings, in these cases the protection of Chapter 13 Bankruptcy may be the best option.
What is the Chapter 13 Bankruptcy?
Chapter 13 bankruptcy protection allows individuals with regular income to develop a plan to pay off their debts over a period of time. The payment plan is usually for a period of three to five years. The bankruptcy law prohibits a plan designed for more than five years.
An individual is eligible for Chapter 13 protection if their debts meet certain eligibility requirements. Currently these amounts are $ 336,900 in unsecured debts and $ 1,010,650 in insured debts. These amounts are subject to the consumer price index and change from time to time.
How does Chapter 13 Bankruptcy Work?
Before applying for Chapter 13, individuals must ensure that they have met the credit counseling requirement that is necessary for individual bankruptcies. There are exceptions to this rule if there is an emergency situation.
When filing for Chapter 13 bankruptcy, the individual must include all documents required by the court and all information about their income, expenses, debts and assets. Tax refunds and proof of having received credit counseling as well as all filing fees and court costs are also required.
After all the documents have been submitted and the fees paid, the court will appoint an impartial trustee to supervise the case. The trustee will supervise everything related to the case from the evaluation of the information provided by the debtor to the eventual disbursement of the payments to the creditors in accordance with the payment plan approved by the court.
What are the Advantages of Chapter 13 Bankruptcy?
There are several advantages to filing for bankruptcy under Chapter 13 if the proportion of your debt and income makes it impossible to meet your obligations as a debtor. First, once you apply for Chapter 13 bankruptcy protection, your creditors must suspend most of your collection efforts. There are only limited collection efforts that can continue in accordance with the federal bankruptcy law.
Chapter 13 can be used to protect a house from the embargo. The application for Chapter 13 protection will temporarily halt foreclosure proceedings and allow the debtor to make up payments on their mortgage for a defined period of time.
Another advantage of the Chapter 13 bankruptcy is that it puts the debtor back in control of his situation. It is the debtor who proposes the payment plan to the court. Although creditors have the right to object to the plan and then the plan must be approved by a bankruptcy judge, it is the debtor who makes the initial proposal and who must agree to all revisions of the proposal.
Downloading a Chapter 13 is a complicated legal matter. However, when the matter is discharged, the debtor is released from all obligations with the creditors involved in the bankruptcy proceeding and can begin to rebuild their credit score and financial life.
Speak Today with a Lawyer Qualified in Bankruptcy Chapter 13
This article aims to be useful and informative. But legal issues can be complicated and stressful. A Lawyer qualified in chapter 13 bankruptcy can meet your particular legal needs, explain the law and represent it in court. Take the first step now and contact a Lawyer qualified Chapter 13 bankruptcy near you to discuss your specific legal situation.