Chapter 13 Bankruptcy: A Guide

Chapter 13 bankruptcy, also known as wage earner’s bankruptcy, is a type of bankruptcy that allows individuals with regular income to repay their debts over a period of three to five years. Unlike Chapter 7 bankruptcy, Chapter 13 bankruptcy does not involve the liquidation of assets. /qlovi.com/

Table of Contents

Eligibility for Chapter 13 Bankruptcy

To be eligible for Chapter 13 bankruptcy, individuals must have a regular income and must not owe more than a certain amount of debt. The debt limits for Chapter 13 bankruptcy are adjusted periodically, but they are currently $2,750,000 for secured debts and $412,500 for unsecured debts.

The Chapter 13 Bankruptcy Process

The Chapter 13 bankruptcy process begins with the debtor filing a petition with the bankruptcy court. The petition must include a list of all of the debtor’s assets and debts, as well as a proposed repayment plan.

The repayment plan must be approved by the bankruptcy court before it can go into effect. The plan must provide for the repayment of all of the debtor’s secured debts, and it may also provide for the repayment of some or all of the debtor’s unsecured debts.

The debtor must make monthly payments to the bankruptcy trustee, who will then distribute the payments to the creditors. If the debtor completes the repayment plan, the remaining debts will be discharged.

Benefits of Chapter 13 Bankruptcy

Chapter 13 bankruptcy can provide a number of benefits to debtors, including:

The ability to keep their assets //kiwilaws.com
The ability to stop foreclosure and repossession proceedings
The ability to reduce or eliminate their monthly debt payments
The ability to get a fresh start financially

Drawbacks of Chapter 13 Bankruptcy

Chapter 13 bankruptcy also has some drawbacks, including:

The need to make regular payments to the bankruptcy trustee
The need to have a repayment plan approved by the bankruptcy court
The possibility of having the plan modified or dismissed if the debtor fails to make payments

If you are considering filing for Chapter 13 bankruptcy, it is important to consult with an experienced bankruptcy attorney to discuss your options and make sure that Chapter 13 is the right type of bankruptcy for you.