Thursday, February 5, 2009
BANKRUPTCY – CHAPTER 13
Bankruptcy Chapter 13 is also known as restructuring bankruptcy. Here, in this case the person who is filing for Chapter 13 bankruptcy does not have to sell the assets to pay off the debts rather he or she has to prepare a repayment plan to meet his financial obligations towards the lenders.In Chapter 13 bankruptcy the repayment proposal of a person is kept under the supervision of the court appointed trustee. The person who opts for Chapter 13 bankruptcy should have an unsecured debt less than $922,975 and not more than $307,675 in secured debts. The person who is filling for Chapter 13 bankruptcy musthave a proper income as the person have to pay back the creditors and the payment is to be made from his or her income.
Chapter 13 bankruptcy is a time consuming procedure. It normally takes 3 - 5
years to complete. The repayment starts within 30 to 45 days after the plan gets approved. The payment is actually made to the court appointed trustee who actually pay the creditors involved in the case. A debtor is generally assisted by an attorney in most of the time incase of any legal matter that can occur in that period. In Chapter 13 the possessions of the defaulter stays intact and the creditors are paid less than the actual amount.
Chapter 13 bankruptcy also comes with certain advantages and disadvantages.
Certain advantages are that, a person can repay all the debts. The property of that person is saved. Certain debts which are not discharged in chapter 7 can be discharged in Chapter 13. And the major disadvantage is the filing stays in the credit report for more than seven years and in that period the person is denied of any kind of credit which he or she may require.
Chapter 13 in some cases is better than Chapter 7 provided a person can afford it.
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