Chapter 13 Bankruptcy

Affordable Chapter 13 Bankruptcy Lawyer in Sterling Heights

Basics Of Chapter 13 Bankruptcy: 

Introduction:

Wage Earner’s Plan or Repayment Plan alternate names for Chapter 13 Bankruptcy is the second most popular chapter after Chapter 7 Bankruptcy. Through this Chapter of the Federal Law, one can retain their property and repay the debt fully or partially over a period of three to five years at most. However, there are several details that are to be kept in mind before filing for Chapter 13 Bankruptcy. Here, we give an overview of all that details which should be considered if you are considering chapter 13 as a relief from your debts.

What are the Advantages of chapter 13 Bankruptcy?

  •         The most important advantage provided by Chapter 13 Bankruptcy is that the debtor can retain his or her property which is not the case with Chapter 7.
  •         Other than mortgaged primary residence of the debtor the individuals can reschedule secured debts over the life time of the plan hence lowering their payment amount.
  •         There is no chance of harassment by creditors as the debtor will not come in contact with them since the payment would be distributed through a trustee.

Who are eligible for filing under Chapter 13 Bankruptcy?

  •         Any individual whose unsecured debts are approximately less than $383,175 and secured debts are less than $1,149,525 can file under Chapter 13 Bankruptcy. However, this does not include Stockbrokers or Commodity brokers.
  •         The debtor must have a regular income since steady income is necessary to make payments for a certain period consistently.
  •         In case the debtor has filed for Chapter 7 Bankruptcy in the past 4 years or Chapter 13 bankruptcy in the past two years, the person will not be eligible for discharge in the current bankruptcy filed.
  •         To be eligible for filing under Chapter 13 Bankruptcy, one has to provide documents proving that they have been diligent about filing their state and federal income tax returns for the past four tax years proceeding the year of filing for bankruptcy.
  •         The debtor’s child support and alimony payments should not be hampered during the course of the plan. In case the individual cannot cope up with the combined expenses and fail to file the necessary reports, his or her appeal for bankruptcy can be dismissed.
  •         There are certain debts that must be fully cleared. In case your monthly income does not permit clearing off the debt within a certain plan period, then the court can withhold confirmation of your plan.
  •         The debtor should comply attending a personal financial management course approved by the office of the U.S. Trustee and must be able to spare at least two hours a day for this curriculum.
  •         One cannot file for Bankruptcy under Chapter 13 if his or her prior appeal for the same had been dismissed within 180 days of the current appeal due to his or her willful violation of a court order.

Discharge under Chapter 13 Bankruptcy :

The debtor is entitled to discharge under Chapter 13 Bankruptcy once he or she-

  •         Has completed all courses for financial management.
  •         Any domestic support obligation that came in before the making of such certification has been paid

The discharge relief the debtor from all charges with a few rare exceptions.

Conclusion:

While it has several advantages, Chapter 13 Bankruptcy is nevertheless a complex procedure that can hardly be done justice in a single discussion. A basic overview of the procedure gives us an idea of what the future has in store for us making the hurdles little less steeper.

Leave a Reply