What is Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy is often referred to as a bankruptcy repayment plan. This type of bankruptcy enables wage earning individuals to propose a three to five year plan to repay their creditors. After the repayment plan commences, creditors are forbidden from pursuing other collection efforts against debtors.
Chapter 13 is similar to a loan consolidation plan in that one payment is made to the bankruptcy trustee each month, and that payment is then distributed to the creditors.
One advantage of Chapter 13 bankruptcy is that it allows individuals to restructure their secured debts over the life of their bankruptcy payment plan, which could result in lower monthly payments. Unlike Chapter 7 bankrutpcy, Chapter 13 allows you to retain your assets and avoid liquidation.
Most people are eligible for Chapter 13 bankruptcy relief, even if you’re self-employed. Your unsecured debts must be less than $307,675, and secured debts cannot exceed $922,975. 11 U.S.C. § 109(e). Corporations and partnerships are not eligible for Chapter 13 bankruptcy relief.
Contact Real World Law, PC today to schedule a bankruptcy consultation with Dr. Glenn A. Brown.