What is Chapter 13?
Chapter 13 is a type of bankruptcy in the US, which can be referred to as "debt reorganization". For demonstrably who are able to repay some or most of their debts (showing proof of income), this may be a better choice of submission, and especially if you are trying to maintain assets such as houses or cars, this bankruptcy can help you better than chapter 7. liability. However, most businesses that describe a set of debt reorganization are not allowed to submit this individual bankruptcy.
pursuant to Chapter 13, before filing, you will visit the court an approved credit advisor and publish information about each debt you owe. You also need to provide an advisory to a list of your monthly expenses, including the amounts, you must pay forsecure debt such as mortgages or car payments. The remaining money is intended to repay your other debts and the debts are preferred. For example, if you owe the child's support, back tax or are personally responsible for employees' debts, these debts have a priority status. Furthermore, debts that would result in a loss of assets, if you did not pay them, are usually second in priority (except for mortgages). Finally, unsecured debt, especially credit card debt, will gain the lowest priority and if you successfully complete your repayment plan, which lasts three to five years, you will have some of these debts forgiven.
Submission of chapter 13 usually stops any steps against you those you owe money. Most creditors cannot sue you or even continue to harass phone calls after filing. If you file with a lawyer, then a lawyer tends to regulate these calls while waiting for a court date.
, howeverThe closure will not be filed, you can still lose your home. You are also limited to the amount of debt you can have if you want to use this bankruptcy. In general, you do not need to have more than a little over $ 900,000 USD (USD) in secure debt and no more than over $ 300,000 in unsecured debt. You also have to prove that you will be able to repay the debt and honor any repayment plan that your credit advisor develops. You should check these dollar amounts with a lawyer or local bankruptcy, because the new rules could change the amount in the future.
As soon as you develop a payment plan and submit chapter 13 to the relevant court, you will make your payments with the appointed or recognized court administrator. This person issues your payments to their relevant resources on the basis of a priority and the administrator can collect the commission for the total amount collected anywhere from 3 to 10%. You must absolutely strictly observe the repayment plan and make all payments in time.
if not teachingInname, it can change your capacity to meet some of your unsecured debts at the end of the plan of the plan. Under certain circumstances, if you have an emergency financial problem, the court may allow you to cover chapter 13 to submit chapter 7. Note that there are some debts such as child support, maintenance or return tax that you can still be obliged to pay.
Another advantage of chapter 13 is that you can be able to protect the co -founder from any duties you have to be on debtors. In some cases, co -founders may be exempt from any payments, or because you have a repayment plan, the effort to select receivables must not be stimulated against the co -founder. According to the current bankruptcy rules, bankruptcy remains in Chapter 13 on your credit rating for seven years, while Chapter 7 remains in your credit report for ten years. This may mean if you make your payments that you have a Cleaner credit message soonerin than you had with chapter 7.
Disadvantages include your future wages are reduced by all provisions on your payment plan. Sometimes people have to free themselves from the majority, not if all their debt, even if it means lose home. Chapter 13 may not be feasible if your income is not sufficient to carry out installments. It also burden you with repayment plans for three to five years, which can be difficult to produce.