USA LAW- CHAPTER 13 BANKRUPTSY

 

Chapter 13 Bankruptcy allows the debtors by court orders to make their debt structuring plan to pay back the creditors. This gives time for debtors to pay back their creditors and also helps them save their business as they have a steady income flow. Here the debtors renegotiate the terms of payments to their creditors before their assets are seized by the court.

Chapter 13 Bankruptcy is filed in the jurisdiction one lives in by writing a petition to the Court . This bankruptcy will be supervised by the court and will allow the entity to pay the debt back in 3 to 5 years but can even take longer. Once finalized in the court the debtor makes the payment to the trustee appointed by the court who in turn makes the payments to the creditors as per the terms set by the court in its judgment. 

The debts that cannot be discharged in Chapter 13 Bankruptcy are student loan debt, punitive damages, and certain types of taxes. Once Chapter 13 Bankruptcy is filed the collection action stops. Many of the unsecured creditors accept the reduced amount of payment and assets such as home and vehicle are retained by the debtor.

In the initial process of filing the Chapter 13 Bankruptcy, the court will appoint a trustee and most likely your automobile will be saved. It is more bearable than the other Bankruptcy. A consultation with a good Bankruptcy Lawyer will help guide you in filing the best Bankruptcy for you. Have your tax returns updated before you file for your bankruptcy. Make your debt payments on time after the court ruling as they will be more bearable. Cover your obligation and have your employer sign off on the plan if feasable. Your monthly payments in this bankruptcy will be no more than 15% of your disposable income. 

One can file Chapter 13 Bankruptcy after Chapter 7 Bankruptcy is discharged for at least 4 years prior and it can be filed in the courts of your jurisdiction but best to consult a legal attorney to guide in the process. Here in this bankruptcy, the debt is reduced with likely as to no interest payments. The debtor will never pay back to his creditors directly it will always be done with a trustee appointed by the court system. 

In Chapter 13 Bankruptcy you will still maintain your living standards, paying the creditors will be a priority but business owners will have cash available. The debtor will still make 401K payments, pay his household bills such as medical, electricity and etc. Keep in mind before filing for Chapter 13 Bankruptcy you must not have filed for Bankruptcy for at least 2 years and Chapter 7 Bankruptcy for at least 4 years. One can even start a small business even if one is in Chapter 13 Bankruptcy.