What is Chapter 13 Bankruptcy?
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Chapter 13 Bankruptcy
In contrast to Chapter 7 Bankruptcy, which allows an individual to have all unsecured debts, such as credit cards and personal loans discharged, Chapter 13 Bankruptcy allows an individual to propose a plan for repaying of debts over 3-5 years.
In addition to residency requirements relating to the United States, Chapter 13 is only available to individuals, as opposed to businesses, with a regular income.
Once a petition is filed in the bankruptcy court, an automatic stay goes into place immediately. The automatic stay prevents most creditors from taking any actions against the debtor to collect debts. This means is that the debtor has immediate protection from foreclosure, garnishment, lawsuits, contact, etc. as soon as the case is filed.
Here is a brief illustration of how Chapter 13 Bankruptcy operates:
- You set up a plan to repay debts
- You get to keep your assets
- You must meet maximum debt limits for both secured and unsecured debts in order to file
The biggest advantages of Chapter 13 is that it allows you to keep your assets, and gives you the opportunity to set up a spread out payment plan that helps you get your financial matters in order without having to completely start over again.
Begin your search for a qualified Chapter 13 Bankruptcy Attorney today!
