What are the disadvantages of Chapter 13?
Debtors remain under court supervision for the life of the plan, which is up to five years. They are not free to make new debts or sell assets without permission. Debtors who propose less than full payment to their unsecured creditors will be required to live on a budget for the life of the plan. The plan payments may be deducted directly from the debtor’s salary by order of the court. If plan payments are not made, the case may be dismissed by the court on motion by the trustee or any creditor may petition the court to have their property returned. Some courts require that you surrender recently purchased property or luxury items before they will confirm a Chapter 13 plan. Chapter 13 is a form of bankruptcy and will appear as such as on your credit record even if you pay all of your creditors in full.
