Menu

Chapter 13 Rules – The Rules You Need to Know Before Applying For Chapter 13

0 Comments

You want to know the chapter 13 rules that apply so that you can determine whether or not this is the right form of bankruptcy to file for? Here are some quick tidbits on this particular law to help you find out if this method would be right for your situation.The first thing you need to know about chapter 13 is hat it involved financial re-organization under the watchful eye of the bankruptcy court, and it doesn’t involved you selling off all your assets to pay off your creditors, as does chapter seven.Assuming you have sufficient income and levels of debt to qualify, you will get a court plan specific to your situation that you are required to file in order to fulfill your debts and receive a full discharge from those obligations.The chapter 13 rules show that the plan needs to be executed within a three to five year time period, and in this time the creditors cannot try to get their money from you except through the bankruptcy court.Keep in mind, this is not for incorporated businesses, but for personal and self employed bankruptcy claims. Also, partnerships usually are not covered under chapter 13 rules, and therefore either need to go for chapter 7 or 11.Keep in mind, while this form of bankruptcy obviously sounds good, as you get to keep your personal possessions and business if you have one, you are not totally relieved of your debts. As I stated above, you need to use a lot of your income you generate over the next several years to pay this off.As opposed to a chapter 7 plan, where your debts are completely voided after selling off your assets, under chapter 13 rules you are obligated to continue paying off those debts. Therefore, in some instances you might actually prefer a chapter 7 bankruptcy, as you can at least wipe the slate clean and start over.With that said, more often than not, if you manage your money correctly, it is definitely best to keep your assets while paying off your debt, but it is not always easy to qualify. In order to do so for chapter 13, you need to have a relatively stable income stream, secured debts which total under eight hundred and seventy thousand, and unsecured debts under two hundred and ninety grand.Therefore, whether or not you qualify depends completely on your individual situation. A good lawyer will be able to advise you on all the specific chapter 13 rules, and help you determine whether or not you’d make a good candidate for this form of bankruptcy.

Leave a Reply

Your email address will not be published. Required fields are marked *