Archive for the ‘Chapter 13 Bankruptcy’ Category

Chapter 13 Bankruptcy

Filing a bankruptcy under chapter 13 of the bankruptcy code allows for individuals to undergo a financial reorganization which is supervised by a federal bankruptcy court. The purpose of a chapter 13 bankruptcy versus a chapter 7 bankruptcy is it allows an income-receiving debtor to keep some assets that would be liquidated under a chapter 7 bankruptcy. Individuals who are earning a regular income and have less than $250,000 in unsecured debt and less than $750,000 in secured debt may be eligible to file for chapter 13 bankruptcy.

A chapter 13 bankruptcy usually includes a repayment period of 36 months. The court will determine the amount of your payments and you will make that amount to the trustee every month for that entire period. It is imperative to understand that if you miss even one payment your bankruptcy will be dismissed and you will no longer be protected under the laws of a chapter 13 bankruptcy. At the end of the 36 month period your unsecured debts will be discharged, regardless of the remaining balance. A benefit of a chapter 13 bankruptcy over a chapter 7 bankruptcy is it is typically removed from your credit report more quickly; seven years after you’re initially file versus ten years for a chapter 7 bankruptcy.

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