Chapter 13 bankruptcy is essentially a reorganization of a person's debt. When someone goes into chapter 13 they must have regular income sufficient to fund a plan. Plan payments are typically made on a monthly basis to a Chapter 13 Trustee and the Trustee will distribute the money to a person's creditors pursuant to bankruptcy laws and the actual plan filed by the Debtor.It is rare that a debtor in chapter 13 pays back all of his or her debt. Many times, the debtor will be paying taxes, car loans, home arrears and their credit cards, collection agencies and medical debt creditors receive very little, or nothing during the bankruptcy.
The amount of the monthly payment that is required is dependent on several factors - 1) income and living expenses, 2) amount of secured debt, 3) amount of any tax debt or other priority debt that needs to be paid, and 4) amount of non-exempt assets the debtor has at the time of filing.
A qualified chapter 13 bankruptcy attorney will be able to gather relevant information from a person and construct a plan that meets all necessary requirements.
Chapter 13 plans typically last 3-5 years and may have some benefits that Chapter 7 cannot offer.
If you are interested in learning more about chapter 13 or chapter 7 bankruptcy the first step is to visit our firm. We offer free initial consultations to discuss your specific situation with an attorney.
Filing a bankruptcy is often considered to be challenging. Which is mainly because filing bankruptcy isn't really common and also the bankruptcy laws keep changing. Thus, to file a bankruptcy case one need to use a bankruptcy lawyer. But, is finding a bankruptcy lawyer close to your neighbourhood that effortless?
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Chapter 13 cram down is a great tool for restructuring and reducing debt. It also allows for the client to preserve integrity by paying back some of the debt.
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