Thread: Filing Chapter 13 Bankruptcy

Filing Chapter 13 bankruptcy

A debtor who files for a Chapter 13 bankruptcy generally has a ceiling of five years within which he or she must repay creditors. The process is carried out under the auspices of the court.

Under the terms of a Chapter 13, you can keep all of your property while the court approves a new, interest-free plan under through which you can repay your debts. A written plan is created, providing the details of all transactions that will occur through your repayment plan and the number of years that repayment plan will take. Repayment must begin within 30 to 45 days of the bankruptcy initiation. Your attorney prepares your repayment plan to best suit your situation.

The law states that creditors must adhere to the repayment plan as strictly as the debtor, meaning they are prohibited from collecting any claims from the debtor that are not included in the repayment plan.

Chapter 13 bankruptcies generally do not involve trustees. The debtor repays the creditors directly. Another advantage of Chapter 13 over Chapter 7 bankruptcy is the availability of the full discharge option. For example, if the debtor successfully makes all of the payments outlined by the plan, he or she receives a full plan discharge. Another advantage of Chapter 13 is that bankruptcy can be filed for, and a repayment plan created, even if the creditors disagree with it, so long as it is approved by the court.

If you think filing a Chapter 13 bankruptcy would make sense for you, you may want to check out this bankruptcy attorney in Monroe, LA.

Chapter 13 is also called debt adjustment. It requires a debtor to file a plan to pay debts from current income. Exemptions also apply in a Chapter 13.