All That You Needed To Know About Chapter 13 Bankruptcy
There are quite a few people who know what Chapter 7 bankruptcy is as it is one where most of the debt of a person gets canceled. But, many are still averse to Chapter 13 bankruptcy where you will be allowed to keep all of your own property unlike Chapter 7 bankruptcy and you will be needed to pay back some or if not full of your debt over a period of three to five years depending on the situation. But, not every person would be able to qualify for Chapter 13 bankruptcy.
If you have a low or unsteady income, then you will not be eligible for getting the benefits that Chapter 13 bankruptcy provides. If you are employed and have a steady income which can be used to pay some or most of the debts that you have, then you will eligible for this Chapter 13 bankruptcy. You might not be eligible for Chapter 13 if you have a lot of debt. A secured debt amounting to more than $1,010,650 and an unsecured debt of over $336,900 does not provide you the chance to go for Chapter 13 bankruptcy.
Filing For Chapter 13
It is important for you to get through the credit counseling from specific agencies approved by the United States Trustee’s office before you look to file for Chapter 13 bankruptcy. You will be charged an amount as fee for the courses and you might also be able to get the counseling at a reduced fee or amount if you are not able to pay the fee in full. You will also be required to pay the fees or filing the papers and there are a series of forms that you need to file for Chapter 13. As these forms and procedures are somewhat confusing, it would be better for you to hire the services of an attorney to properly fill the forms.
The repayment plan has to be in place before you fill up the Chapter 13 bankruptcy papers as everything hinges upon this repayment plan. It will say the amount of money that will be paying back and how you will utilize the money to pay your debts. There are a few debts like child support, wages to employees, alimony and so on that is referred to as priority debts and is needed to be paid back in full. Also, your mortgages and car and other loans will also be included in the repayment as well as the amount that you have already paid to these debtors. The unsecured debts like credit card bills or medical bills need not be paid back in full or sometimes need not be paid in full depending on the financial situations.
The duration of your repayment plan will depend on the amount you need to repay and your financial earnings. If your income for the past six months before filing the chapter 13 papers is over state’s median income, then you will be going for a five year plan. A three year plan will be proposed if your income is below the approved median income level. If you are current on child support and alimony, then your remaining debt will be discarded off only if you have completed your repayment plan.