chapter 13 bankruptcy

Chapter 13 Bankruptcy - your questions answered right here...

More About Chapter 13 Bankruptcy...



Chapter 13 bankruptcy is basically a reduction or adjustment of your debt if you have a regular income. It allows you to keep your property. You use your income to pay some or all of your debts over a period of three to five years in a court-supervised process.

One requirement to be eligible for chapter 13 bankruptcy is to have completed credit counseling from an approved agency within 180 days of filing. A list of agencies can be found at www.usdoj.gov/ust/. If you owe too much, you may not be eligible for chapter 13. Your unsecured debts cannot be over $307,675, and your secured debt cannot be over $922,975.

A secured loan is one that gives a creditor the right to take back specific property (a house or car, for example) if you don't pay your debt. An unsecured loan (medical bill or credit card) is not attached to any specific property.

If you qualify for chapter 13 bankruptcy , you will need to file your credit counseling completion certificate and a form asking for chapter 13 relief along with lists of what you own, what you owe, and your income and expenses. You will also need last year's federal tax return and proof that you filed federal and state returns the previous four years.

A very important item in filing chapter 13 bankruptcy to submit is a plan showing how you plan to repay your debts. There isn't an official form for the plan, but many of the district bankruptcy courts have their own form to use. You must begin making your payment under this plan within 30 days after filing. Payments are usually made to the trustee appointed by the court to oversee your case. Once the court confirms your repayment plan, the trustee will pay your creditors.

You are required to pay certain debts in full. These debts include child support and alimony, some tax obligations, and wages you owe employees. These are considered priority and go to the first of your bankruptcy repayment line. Your repayment plan must also include your regular payments and the amount you're behind on your secured debts.

Your bankruptcy payments will fall into three categories: secured creditors who you pay directly outside of your repayment plan (mortgages, for example); unsecured creditors and some portions of secured creditors are paid by the bankruptcy trustee inside your repayment plan, and creditors who you owe because your incurred the debt after you filed for bankruptcy (utility bills, for example). All payments should be made on time.

You will make payments to the bankruptcy trustee for three to five years depending on your income and the size of your debt. Once you have completed the repayment plan, all eligible remaining debts are canceled. Before you receive the discharge, you must show you are current on any child support and/or alimony payments and have completed a budget counseling course. This course is separate from the counseling you must have before you file for bankruptcy. A list of approved agencies can be found at the same website.

Once you have filed chapter 13 bankruptcy, be sure to make your payments as stated in your repayment plan. Failure to pay can result in your case being dismissed. If that should happen, you lose protection in terms of reducing your debt and the protection from creditors given by the court.

Once you have filed chapter 13 bankruptcy, be sure to make your payments as stated in your repayment plan. Failure to pay can result in your case being dismissed. If that should happen, you lose protection in terms of reducing your debt and the protection from creditors given by the court.

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chapter 13 bankruptcy