What Is Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy, sometimes called reorganization bankruptcy, is one of the six types of bankruptcy that exist in the USA. Defined in the Bankruptcy Code, it can be pretty different from Chapter 7 Bankruptcy. To start with the beginning, it is designed for adjustment of debts of an individual with regular income. This type of Bankruptcy allows a debtor to keep property and pay debts over time, usually a few years (to be more precise three to five years). In which situation Chapter 13 Bankruptcy is an option for you? First of all we have to be clear about one thing: a business, even if it is owned only by one person, cannot file for Chapter 13 bankruptcy. In this case Chapter 11 Bankruptcy is probably more appropriate. Secondly, as individual, you are not allowed to file Chapter 13 bankruptcy if you are a commodity broker or Stockbroker, even if you want to discharge only personal debts. In all the other cases your eligibility for filing Chapter 13 Bankruptcy will depend on the amount of your income, which, after subtracting certain allowed expenses and required payments on secured debts will allow you to meet your repayment obligations. Moreover, you must have less than $307,675 in unsecured debts like credit cards as well as less than $922,975 in secured debts (car loans, home mortgage or company loans) The main advantage of this type of bankruptcy is the fact that it will allow you to pay your debs over an extended period of time. Usually, the amount that you are demanded to repay under a Chapter 13 plan is depends on the total of your planned monthly payments over three years. You will pay only as much as you can afford, given your sincere desire to repay your debt. The minimum payment will rely, of course, by the number but mostly the value of the properties that you want to keep. The good new is that when you complete the payments, debt not paid will automatically be discharged except a number of debts that "survive" bankruptcy, such as most tax debts, child support, student loans, (unless the court decides otherwise), and debts that the court has declared "nondischargeable" because the creditor objected (most commonly encountered in case malicious acts or fraud ). The "current monthly income" is a term clearly characterized in the Bankruptcy Code. It defines the average monthly income received over the six calendar months before filing bankruptcy, including income from the debtor's spouse if the petition is a joint petition, but not including social security income or certain payments made because the debtor is the victim of certain crimes. If you will ever decide that Chapter 13 bankruptcy it's the rights solution for you, $274 is the amount of money you must pay the bankruptcy court as filing fee, payable to the Clerk of Court for the United States Bankruptcy Court. Concerning the attorneys, they use different services and costs may vary. Attorney's fees are usually fixed, which means that once you pay the set fees and costs, there are no other costs for normal cases. In case of converting a case under chapter 13 to a case under chapter 7, a fee of $15 will be charged. |
