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(Disclaimer: The information contained on this website is provided for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the issues related to the area of consumer bankruptcy. Every individual's factual situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state or locality regarding specific information.)
To be eligible to be a chapter 13 debtor, individuals must meet, among other things, the following two requirements: (i) they must have a regular income, and (ii) their debts must not exceed a certain amount. If the individual's current monthly income is less than the applicable state median income, the plan will generally be set up for three years, although the court may approve a longer plan. If the debtor's current monthly income is greater than the applicable state median, the plan is generally for five years.
Chapter 13 bankruptcy filing is a way for individuals to undergo a financial reorganization supervised by a federal Bankruptcy Court. The Bankruptcy Code anticipates the goal of a Chapter 13 case as enabling income-receiving debtors debt rehabilitation provided they fulfill a court-approved plan. Compare the goal of Chapter 13 with the relief contemplated in Chapter 7 that offers immediate, complete relief of many oppressive debt(s).
Under Chapter 13, the debtor proposes a plan to pay his creditors over a 3 to 5 year period. During this period, his creditors cannot attempt to collect on the individual's previously incurred debt except through the bankruptcy court. In general, the individual gets to keep his property, and his creditors end up with less money than they are owed.
The disadvantage of filing for personal bankruptcy is that a record of this stays on the individual's credit report for 10 years. During the Chapter 13 case the debtor is not permitted to obtain additional credit without the Chapter 13 Trustee's permission. Moreover, creditors may not be willing to risk lending money to such an individual. However, this disadvantage is not unique to Chapter 13; it may also apply to individuals currently in a Chapter 11 case or those who are in or have recently been in a Chapter 7 case.
The advantages of Chapter 13 over Chapter 7 include: the ability to stop foreclosures and to have a mortgage that has been accelerated declared reinstated upon bankruptcy plan completion; to achieve a discharge of debts of kinds not dischargeable under Chapter 7; to value collateral; and in some cases; to prevent collection activities against non-filing co-signers (co-debtors) during the life of the case.
More Detailed Information at www.dlblaw.com/Chapter13
To be eligible to be a chapter 13 debtor, individuals must meet, among other things, the following two requirements: (i) they must have a regular income, and (ii) their debts must not exceed a certain amount. If the individual's current monthly income is less than the applicable state median income, the plan will generally be set up for three years, although the court may approve a longer plan. If the debtor's current monthly income is greater than the applicable state median, the plan is generally for five years.
Chapter 13 bankruptcy filing is a way for individuals to undergo a financial reorganization supervised by a federal Bankruptcy Court. The Bankruptcy Code anticipates the goal of a Chapter 13 case as enabling income-receiving debtors debt rehabilitation provided they fulfill a court-approved plan. Compare the goal of Chapter 13 with the relief contemplated in Chapter 7 that offers immediate, complete relief of many oppressive debt(s).
Under Chapter 13, the debtor proposes a plan to pay his creditors over a 3 to 5 year period. During this period, his creditors cannot attempt to collect on the individual's previously incurred debt except through the bankruptcy court. In general, the individual gets to keep his property, and his creditors end up with less money than they are owed.
The disadvantage of filing for personal bankruptcy is that a record of this stays on the individual's credit report for 10 years. During the Chapter 13 case the debtor is not permitted to obtain additional credit without the Chapter 13 Trustee's permission. Moreover, creditors may not be willing to risk lending money to such an individual. However, this disadvantage is not unique to Chapter 13; it may also apply to individuals currently in a Chapter 11 case or those who are in or have recently been in a Chapter 7 case.
The advantages of Chapter 13 over Chapter 7 include: the ability to stop foreclosures and to have a mortgage that has been accelerated declared reinstated upon bankruptcy plan completion; to achieve a discharge of debts of kinds not dischargeable under Chapter 7; to value collateral; and in some cases; to prevent collection activities against non-filing co-signers (co-debtors) during the life of the case.
More Detailed Information at www.dlblaw.com/Chapter13
Chapter 13 Bankruptcy: Overview
Law Office of
Douglas L. Barrett, LLC
1149 W. Center Street
Orem, UT 84057
801-221-9911
Douglas L. Barrett, LLC
1149 W. Center Street
Orem, UT 84057
801-221-9911