Chapter 13 bankruptcy Information articles can really just give basic guidelines set out by the codes of the Federal Court. To understand which type to file under is best left to a lawyer who specializes in this area of law. An interview about your circumstances and current obligations is often done at no charge.
Also known as, the wage earner’s plan, Ch. 13 can only be filed if you are an individual or small business owner. The business must not be a corporation or partnership, only self-employed or unincorporated are qualified. You must have a regular income that is large enough to cover your basic monthly expenses but not enough to cover your other incurred debt. There are maximum amounts for debt on unsecured and secured debt. These change to reflect the current consumer price index
An alternate way for individuals to file is under a Chapter 7. This will allow for complete discharge of all un-secured debt incurred prior to the file date. Secured debt for a home and car can be kept if the value falls within the parameters of the Federal code. Only essential assets are allowed to be retained, all other non-essential debt will have to be forfeited to the trustee.
You will be able to keep you car and your home under the rules of the earner’s plan as well as most or all of your other assets. Your debt obligation, however, will not be discharged, but restructured by the court. You will have to pay your creditors. There are some debts that can be included in this type that are not allowed in other types.
Also, under the wage earner’s plan, you can may be able to stop foreclosure proceedings and catch up on past due payments. Other secured debt (not including the home) can be modified to extend payments over the life of this action. In effect, this may lower the payment. If you have co-signers on some of your secured debt, they too may be protected under this plan.
When you consolidate your debts, no longer will you have to interact with each creditor individually, nor will you be subjected to their telephone calls. Your responsibility will be to the court to make one payment a month. The trustee will take this money and pay your creditors. There is a limited period of time given for repayment, normally it is three years but may be extended for up to but not exceeding an additional two years.
With this Chapter 13 bankruptcy Information, you should get some understanding about if you would qualify. If not, perform a web search to find information that is more detailed. While searching the internet you can also find qualified lawyers in your area.