Debt Management Answers For You…

When filing for bankruptcy, there are several codes which can be filed under – chapter 7, chapter 11 and chapter 13. Here we will concern ourselves with filing under chapter 13 of the bankruptcy code, which allows the debtor to keep property and pay the debt off over time. (chapter 11 is used by businesses, allowing them to ‘reorganize’ or restructure their debt).

The debt is usually paid over a three to five year period. This form of bankruptcy is usually chosen by those who have a regular income and who do not wish to deal with the new laws of chapter 7 bankruptcy codes.

Known as the wage earners plan, chapter 13 bankruptcies enable debtors to pay off part of their incurred debt.

This is not as good as working out a plan with your creditors and arranging payments individually or through a debt consolidator. It does show some financial responsibility and indicates the debtor’s willingness to make up for their mistakes.

Chapter 13 bankruptcies act as sort of a consolidation loan in itself. Because the debtor is making payments on the owed monies, it does not have as bad impact on the credit reports. But the individual does not have direct contact with the creditors and payments are distributed amongst them.

To be eligible for the Chapter 13 bankruptcy an individual, even if self-employed must have an unsecured debt of under $307,675 and secured debts must be under $922,975.

No debtor may file for chapter 13, or any bankruptcy chapter during the preceding 180 days a previous bankruptcy petition was dismissed.

Also, there are fees when filing for bankruptcy, even the chapter 13 code. The courts can charge a case filing fee and miscellaneous administrative fees. These fees must be paid when filing unless with the courts permission, it can be paid in installments.

Please remember, do your due diligence and determine rules, regulations and fees in your area. Changes are constant.

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