Chapter 13 Bankruptcy
On Overview of Chapter 13 Bankruptcy
The United States Constitution authorizes Congress to set Bankruptcy Laws, those laws are referred as the Bankruptcy Code. Chapter 13 of the bankruptcy code refers to that chapter which allows individual debtors with regular income to repay some or all of their debt over a period time.
In a chapter 13 bankruptcy the debtor proposes a repayment plan to repay their creditors. The chapter 13 plan can repay such things as back mortgage payments, back taxes, back child and spousal support. The plan can also propose to remove, or strip second mortgages (see next section).
Your chapter 13 plan can repay your creditors back for pennies on the dollar. What this means is that you can pay back anywhere between 0% and 100% to your creditors. The amount of your payment is based on your ability to pay.
Your ability to make a chapter 13 plan payment will depend on factors such as your income, family size and monthly expenses.
Chapter 13 has some distinct advantages over chapter 7, it allow you to repay debts that are not dischargeable in a chapter 7 over an extended period of time. In addition, Chapter 13 can get you current on your mortgage payments so the mortgage company will not foreclose on your house. Chapter 13 may also help you keep your car by paying the car through your chapter 13 plan. In some circumstances Chapter 13 can also remove mortgages on your house.
Should you file for Chapter 13? If you do, what will your monthly payments be? What are the advantages and disadvantages to you for filing? The only way to answer these questions to set up a free consultation with our office where we will be able to answer these questions.
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