Chapter 13 bankruptcy
What is Chapter 13 bankruptcy?
There are a number of consumers who are under the burden of debts and quite a number of these opt for bankruptcy as their savior. However when people file for bankruptcy they are confused between Chapter 7 and Chapter 13 bankruptcy. Bankruptcy is actually a legal procedure that is filed in the court of law. The reason for filing bankruptcy is that it helps people come out of debt who are unable to pay their debts. This would help them in having a new financial start.
The Chapter 13 bankruptcy is also called as the reorganization bankruptcy. For filing a Chapter 13 bankruptcy you are normally required to give a fee of $185. Usually people who wish to pay off their debts in a period of 3-5 years file under this bankruptcy chapter. This type of bankruptcy allows them to keep some of their possessions and meet their normal living expenses. When filing for Chapters 13 bankruptcy the person is required to give a petition that would list the person’s assets and liabilities. Soon after this the person is required to give a repayment plan, which has been reviewed by his creditors to see whether they meet with the needs or not. If the creditors don’t present any objection to the repayment plan then they can follow the plan.
However there are some additional confirmations that take place before a Chapter 13 bankruptcy. One of these confirmation tests would compare the amount that the unsecured creditors would receive under this plan as compared to what they would receive under Chapter 7 bankruptcy. The aim is that the unsecured creditors must be able to receive the same amount of compensation as Chapter 7. Another test requires the person filing for bankruptcy should also pay the rest of their disposable income towards the repayment plan.
The Chapter 13 bankruptcy is beneficial for consumers who are interested in keeping some of their possessions with them. If the person has missed many payments on the mortgage and the house is to be put on foreclosure then the person can stop the foreclosure by filing Chapter 13 bankruptcy.
Filing Chapter 13 bankruptcy
The process of filing bankruptcy depends on the fact that who is filing for bankruptcy a business or an individual. If a business then even a sole proprietorship cannot file for bankruptcy and they need to file under Chapter 11 bankruptcy and take the help of an attorney. However if they file under Chapter 13 as an individual who owns a business then they can take up the business related debts or which they are personally responsible.
Debtors who wish to file for Chapter 13 bankruptcy are required to have a steady income. It is important that the person filing for Chapter 13 bankruptcy has a regular source of income so that the debtor should be able to support him and the needs of the family. After meeting with his needs he should have some amount left to make the payments towards the debt for 3-5 years. The amount that they are supposed to pay would depend on the amount of debt that they have. To qualify for filing Chapter 13 bankruptcy the value of the secured debts should not be more than $922,975 and unsecured debts should not be more than $307,675.
Chapter 13 bankruptcy lawyers
When you opt for Chapter 13 bankruptcy it is advised that you take the assistance of a lawyer. The lawyer would make you aware of the laws and the procedure for filing bankruptcy. If you are not aware of the laws then it is quite possible that you would lose your property. The Chapter 13 bankruptcy lawyer would work for the benefit of the client and help him in saving his property.
The lawyer would first analyze your monthly payments towards the debts and then would determine the monthly payments. Once that the lawyer has worked out the payments with the court then the debtor is supposed to make the payments towards the debts. Taking the help of a lawyer is important, as he would guide you whether filing bankruptcy would be the right decision for you. The Chapter 13 bankruptcy takes a longer time as compared to Chapter 7 bankruptcy. Filing bankruptcy under Chapter 13 is a good option for people who have a lot of equity in their house or have non-dischargeable debts like student loans, child support, alimony etc.
The Chapter 13 bankruptcy lawyer can, not only guide you in filing bankruptcy but he would also make you aware of the consequences of filing for Chapter 13 bankruptcy. It is best to consult a lawyer to determine the exemptions that you can have when filing for Chapter 13 bankruptcy. The lawyers have a high level of experience in handling bankruptcy cases but you should make sure that you have chosen a lawyer after much contemplation and search. It is advised that you do a lot of research before taking the help of a lawyer so that you would be sure that the right person is handling you case.
If you wish to file a Chapter 13 bankruptcy then it is advised that you first consult a lawyer so that he can analyze your financial condition and suggest you whether Chapter 13 is a good option for you or not.
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