What is Chapter 13?
So many chapters, so little time – what is chapter 13? If you are confused by this bankruptcy filing, you’ll find most of the information you seek within this article.
Never before did a book have so many chapters! The “bankruptcy book” is long and complex, which is why a good bankruptcy lawyer is always a good idea. You can find lots of information regarding your particular case on the internet, but nobody can decipher all that legal mumbo-jumbo quite like a great lawyer. In short, reading through this article will give you a head start regarding this filing, but you should take the time to hire a lawyer as well. So, what is chapter 13?
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Those debtors that do not want to liquidate their assets usually file for Chapter Thirteen. Rather than having all of their assets sold, divided, and distributed by a trustee, this filing will allow them to pay back creditor through future income. In order to file for this type of protection, the debtor must work with the trustee in order to formulate a plan, which the creditors and Bankruptcy Court must review and approve. Most of the time, this filing is only available to those debtors that have “unsecured debts” usually in the form of credit cards. Also, this filing is available to those with less than $100,000 worth of unsecured debts and less than $350,000 worth of secured debts (mortgages and car loans).
If the plan that the debtor and trustee come up with is approved, the debtor must pay creditors based upon salary for up to five years. Even though debtors may be able to keep a lot of their property under this plan, they cannot purchase any new assets without court supervision. Also, this type of bankruptcy will remain on a debtor’s credit record indefinitely. Lastly, if the payments are not made in full, creditors have the right to demand a Chapter 7 filing take place instead. By now, you should be able to partially answer the original question (what is chapter 13?).
From A Bankruptcy Lawyer Now.
As previously mentioned, this information is helpful…but not inclusive. There are a lot more details regarding this type of filing that must be understood with the help of a lawyer.
What is chapter 13? Well, for some people it is a way out of debts that they cannot repay. For others, it is one option that should not be considered.