Filing bankruptcy is a serious decision in a person’s life. When property or other assets are involved,
the decision can be even more important.
Chapter 13 bankruptcy is designed to help those debtors who do have property, secured debts, or other assets that they want to
protect throughout the bankruptcy process. For debtors who have a regular income, Chapter 13 can be a helpful way to reestablish
financial stability.
Because of the asset protection involved with Chapter 13 bankruptcy, the process typically takes a bit longer than it would take
to receive a Chapter 7 bankruptcy discharge.
While under the protection of a Chapter 13 repayment plan, a debtor should have the means necessary to eliminate debt.
Repayment plans can last from 3-5 years.
Talking with a local bankruptcy attorney may be a good way to get bankruptcy information and learn about filing bankruptcy
(http://www.totalbankruptcy.com/overview/default.aspx).
Chapter 13 Bankruptcy Process
Chapter 13 bankruptcy does not eliminate debt, but instead consolidates, prioritizes and sometimes reduces the debt.
Under Chapter 13, debtors are able to pay one monthly payment to a bankruptcy trustee instead of having to manage and pay several
bills each month.
Whether Chapter 13 is right for a specific person depends completely upon the individual situation. If a person has filed Chapter
7 bankruptcy within the last eight years, they will be ineligible to file Chapter 7 again – so Chapter 13 might be an option at that
point.
Chapter 13 Bankruptcy Qualifications
Most debtors who are considering bankruptcy can qualify for Chapter 13 bankruptcy.
So, when is Chapter 13 a good option? For a debtor who:
- Owns cars, homes or land that needs to be completely protected from liquidation
- Has debt from job loss, injury or sickness
- Still have a regular income to make monthly payments to a bankruptcy trustee
Under Chapter 13 bankruptcy, debtors are not required to take a means test like those who file Chapter 7 bankruptcy are required to take. For most people who have a steady income, Chapter 13 bankruptcy is an option.
Debtors filing Chapter 13 are still required to complete an approved Credit Counseling Briefing approved by a U.S. Trustee. When filing for bankruptcy, a bankruptcy lawyer will include the Credit Counseling certificate with the bankruptcy petition.
If the certificate is not included, that bankruptcy case may be dismissed from the court.
Chapter 13 Bankruptcy Discharge Requirements
In addition to making regular payments to a bankruptcy trustee through the Chapter 13 bankruptcy repayment plan, debtors in Chapter 13 bankruptcy must also complete a Debtor Education Course about financial management.
Without completing the education course, debtors cannot be discharged from Chapter 13 bankruptcy. A bankruptcy lawyer can help recommend an approved Debtor Education Course.
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