A type of bankruptcy in which a person keeps his assets and pays creditors according to an approved plan. A petitioner will request to reorganize assets and request for debts to be forgiven.
A typical chapter 13 process is listed below:
- Creating a list of creditors and the amount of their claims
- Disclose the amount and sources of the debtor’s income
- A list of the debtor’s property, as well as an accounting of all contracts and leases in the debtor’s name
- A breakdown of the debtor’s monthly living expenses
- Tax information, from the debor including the most recent federal tix filings, statements and returns.
The difference between chapter 7 11 and 13 backruptcy
Chapter 7 bankruptcy is the easier and quicker of two options when filing for personal bankruptcy. It doesn’t require a repayment plan but does require you to liquidate or sell your nonexempt assets in order to pay back creditors, whereas Chapter 13 lets qualified debt be eliminated through monthly repayments lasting as long as 36 months over either three years or five years depending on which one will reduce total interest charges paid by more than $10,000. Chapter 13 and chapter 11 bankruptcy usually apply to businesses.
Filing for chapter 13 bankruptcy
To be eligible for chapter 13 bankruptcy, you must have over $419,275 in unsecured debt and need to pay off what’s owed but don’t have the financial means for it, Chapter 13 may be your best bet. This type of bankruptcy will allow those who qualify to organize their finances so that they can eventually repay all debts without any additional interest or penalties being applied.
To file for a Chapter 13 Bankruptcy an individual must first meet certain eligibility requirements such as having no more than $1,257,850 in secured debt on anything like mortgages or car loans (or at least not much more). And if you’re looking to get out from under credit card bills which are just too high there is also good news because people eligible for this form of bankruptcy get significant advantages.
Chapter 13 bankruptcy is an important financial tool
If you have substantial debts and meet the criteria, chapter 13 bankruptcy could be a good option for you. It is
Structure of chapter 13 bankruptcy
Chapter 13 bankruptcy generally applies to businesses. A petitioner will submit articles to reorganize and safeguard assets from being repossessed and foreclosed on. Typically under chapter 13, the petitioner will ask for other debts to be forgiven which can significantly lessen the burden from the individual or business in debt.« Back to Glossary Index