Filing Chapter 13 Bankruptcy - A Procedural Overview

Chapter 13 bankruptcy law is on occasion referred to as reorganization bankruptcy. It's uniquely different than Chapter 7 bankruptcy. In a Chapter 7 bankruptcy almost all of your debts are canceled out. But, you must forfeit any belongings that aren't exempt from seizure by your creditors. Under Chapter 13 bankruptcy law, you don't have to relinquish any personal possessions. But, you're expected to use your income to pay off most or all of what you owe your creditors. Your payments to creditors are made over time, generally from three to five years. The time parameter turns on 1960 Topps baseball cards amount of your debts and income.

Are You Qualified for Chapter 13 Bankruptcy

Chapter 13 bankruptcy isn't for everybody. Chapter 13 bankruptcy law calls for using your income to pay back some or all of your debt. So, you'll have to demonstrate to the court that you're capable of fulfilling your payment obligations. If your income is sporadic or too low, the court may not let you to file under Chapter 13 bankruptcy law.

Before filing a Chapter 13 bankruptcy, you must attend credit counseling from an authorized agency. These agencies are permitted to charge a fee for their services. But, if you can't afford to pay the fee, they have to offer cut rate counseling and, in a few cases, free counseling.

Chapter 13 Repayment Plans

The most critical part of your Chapter 13 bankruptcy paperwork is your repayment plan. It depicts in detail how much money you'll give to each one of your debts. There's no official form for the plan. But, most all courts supply their own forms.

Your Chapter 13 plan must pay back particular debts in full. These debts are called "priority debts" because they're considered important enough to spring to the head of the bankruptcy repayment line. Priority debts Bigfoot child support and alimony, wages you owe to employees, and certain tax obligations. 1960 Fleer baseball cards your plan must encompass your regular payments on secured debts.

The plan must indicate that any income you have leftover after getting to these mandatory payments will go toward paying your unsecured debts. You don't have to repay these unsecured debts in full. You only have to show that you're applying any leftover income towards their repayment.

The duration of your repayment plan hinges on how much you make and how much you owe. If your typical monthly income during the six months before the date you filed for bankruptcy is greater than the typical income for your state, you'll have to propose a five-year plan. If your income is smaller than the normal, you may propose a three-year plan.

Regardless of how much you bring in, your plan terminates when you pay back each of your debts in full, even if you've not donate car charity the three- or five-year mark.

If you sustain a job loss after embarking on a payment plan or determine that you can't keep up the payments on your Chapter 13 bankruptcy plan, the bankruptcy trustee may alter your plan. It's even possible that the court could permit the discharge of your debts on the ground of hardship. Hardship may include the abrupt loss of a job due to a company shutting down or a severe debilitating illness. If the bankruptcy court won't permit you to change your plan or give you a hardship discharge, you may be able to change to a Chapter 7 bankruptcy.

When Is a Chapter 13 Case Over

Once you finish your repayment plan, each continuing debt that's eligible for a discharge will be canceled out. But, before you'll be able to acquire a discharge, you must prove to the court that you're current on your child support duties and that you've finished a budget counseling course. This budget counseling course is in addition to the compulsory credit counseling you experienced before filing for bankruptcy.

Harvey L. Cox is an attorney and certified mediator in Texas. For more information on bankruptcy issues, visit The Bankruptcy Law Info 1887 Old Judge N172 href="TheBankruptcyLaw.info">TheBankruptcyLaw.info