In a Chapter 13 bankruptcy, the debtor essentially goes to court and asks for permission to reorganize their liabilities in a single payment. The debtor will take all your unsecured liabilities, as well as any arrears in your home or automobiles, will accumulate them all and will propose to the bankruptcy court a reimbursement plan. That repayment plan generally lasts between 3 and 5 years and when the repayment plan ends, the debtor is released from all remaining obligations. Chapter 13 bankruptcy is the best option for people who are behind in their homes and are about to be foreclosed, have cars that are about to be seized, have child support, back taxes and even unpaid school loans. Watch the video from chapter 13 above, where an experienced professional explains exactly what Chapter 13 bankruptcy is.
The Chapter 13 bankruptcy rules are a little different from other types of bankruptcy. When someone files for bankruptcy under Chapter 13 of the Bankruptcy Code, their goal is to have the opportunity to pay some or all of the debts on their behalf, in better terms, that is, less or no interest. Unlike Chapter 7, which involves the liquidation of assets, the Chapter 13 process involves the restructuring of debts that allows the debtor to use whatever income it may have in the future to pay the creditors. The filing of Chapter 13 bankruptcy is, therefore, applicable to a debtor who has a regular income and can afford to request such adjustments or reductions.
The Bankruptcy Code of the United States grants the debtor a maximum limit of 5 years, within which the creditors must receive reimbursement. While the lawyer will safeguard their interests, the entire process is carried out under the supervision of the courts.
While debtors can keep all their assets, the court approves a new interest-free repayment plan. A written plan is created that provides details of all the transactions that will occur and the duration of the same. The refund must begin between thirty and forty-five days after the case has begun. The transitional payment stage to a fiduciary who then pays a creditor, as in Chapter 7 Bankruptcy, is generally eliminated with Chapter 13 Bankruptcy.
Although, in some cases, people may involve a fiduciary who would be responsible for disbursing money to creditors according to the plan. In addition, in accordance with the law, creditors must strictly comply with Chapter 13 of the Bankruptcy Return Plan approved by the court and, in fact, are prohibited from collecting any claim from the debtor. Your lawyer will prepare a new payment plan that best suits your situation.
The only advantage of Chapter 13 on Chapter 7 Bankruptcy is the total discharge option that does not apply in the Chapter 7 filing. For example, if a debtor is able to complete all the necessary payments in the plan, it will be discharged. total of the plan.
(There are some exceptions to this case, about which your lawyer will guide you if necessary.) Another advantage of the Chapter 13 filing is that a refund can be made even if the creditors do not agree with it, provided that the approve The court. Although, in all fairness, the court allows creditors to file an objection, if they have one.