Bankruptcy Bliss

If you have a job and or income on a regular basis then Chapter 13 Bankruptcy may be the best of the Bankruptcy options for you. Chapter 13 is for individuals or small businesses (one owner) that have the means to pay a sizable amount of their debt back but may need aditional time and the protection of a Bankruptcy Court in order to do so. If you have the income to sustain normal expenses and still make payments within 3-5 years to your creditors, this may be the best option for you.

What You Should Know About Chapter 13 Bankruptcy

If you have a job or regular income, Chapter 13 Bankruptcy could be for you. It was enacted for individuals and small proprietary business owners (not corporations) who have the ability to pay off at least a substantial amount of their debt, but need the protection of the bankruptcy court and a significant amount of time to make the payments. It is sometimes referred to as reorganization bankruptcy. People filing under Chapter 13 typically have non-exempt property they prefer to retain, and have stable and regular monthly income to pay normal expenses and can still contribute towards debt repayment, Chapter 13 bankruptcy will allow to pay them to pay their remaining debt over a period of 3 -5 years and begin anew.

Part of the pre-filing requirements is a meeting with an approved credit counseling agency. You must complete an instructional course to assist you with financial management including budgeting. This is important because the courts will often require you to submit a proposed budget to see if you can satisfy the financial requirements of the payment plan. You must be a resident of the state you are filing for bankruptcy protection for at least 90 days prior to filing.

The maximum allowable total debt for filing Chapter 13 is $922,975 and unsecured debt (such as credit card and personal loans) must be less than $307,675. Certain debt cannot be included in Chapter 13 Bankruptcy including child support, alimony, educational loans, criminal fines and restitution ordered by the courts,

Your repayment plan is a legal agreement between you and your creditors. You guarantee to pay based on a monthly payment schedule and your creditors will forgive a portion of your debts. The court usually appoints a trustee to receive your payments and distribute to your creditors. As long as you continue to make your monthly payments, creditors included in the agreement are unable to commence any collection action against you.

While under Chapter 13 protection, you cannot incur additional (new) debt greater than $250.00 unless you obtain court approval. This could affect you if you need a student loans or a car lease.

After you file you bankruptcy petition, the court will usually issue an order prohibiting from collecting any portion of their debt from you, seizing property such as your car or commencing any continuing legal against you.

Following the filing of your petition and pay the $274 filing fee, you have 15 days to file the financial schedules with the court detailing your assets, liabilities, expenses and income along with your repayment plan.

You MUST make your first payment within 30 days after your plan was filed or the judge can dismiss your case. Approximately 6 weeks after your case is filed, their will be a Meeting with your Creditors chaired by the trustee. You must attend and testify to the accuracy of statements in your bankruptcy request The creditors have 30 days after this meeting to file objections to any of your exemption claims. The judge will hold a hearing judge approximately 45 days after the Meeting with the Creditors with the trustee. This will be the last chance for your creditors to state their objections. Your creditors have 90 days after the Meeting of your Creditors to submit legal documents to the court to prove their claims. All payments must be made within 5 years from the date of your initial payment.