What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a debt repayment proceeding. The debtor turns over a specified portion of his/her future earnings to the Chapter 13 trustee, who then distributes dividends (payments) to creditors who have filed bona fide claims. The method of determining the dividend distribution is determined by a Chapter 13 Plan which is filed with the Bankruptcy Court by the Debtor. The debtor receives a discharge of all dischargeable debts after the Plan is completed and all payments under the Plan have been made.
Chapter 13 is a type of bankruptcy in which debtors, either individuals or married couples, choose to pay at least a portion of their debts out of their ongoing income, rather than having their non-exempt assets sold with the proceeds going to their creditors. As a Chapter 13 debtor, you are required to make regular payments to the individual who serves as the Chapter 13 Trustee . The Chapter 13 Trustee is appointed by the United States Trustee and authorized by the Bankruptcy Code to administer your Chapter 13 Plan . Your Plan is the legal document that you filed with the Court setting forth how much you will repay each of your creditors.
Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.
A Chapter 13 bankruptcy is a Court supervised debt reorganization process. Chapter 13 bankruptcy allows a debtor to enter into payment arrangements called a Chapter 13 plan, under the supervision of the Bankruptcy Court. A “Chapter 13” bankruptcy offers you the protection available under Chapter 13 of the United States Bankruptcy Code allowing you to repay your debts over time based on your disposable income. You generally do not relinquish any of your property and in a Chapter 13 bankruptcy, and utilize your disposable income to pay all or part of your creditors over a time period ranging from a minimum of three to a maximum of five years, depending on your specific situation and ability.
Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter13 bankruptcy is for people who want to pay off their debts over a period of three to five years. It allows individuals who have non-exempt property to keep those assets while pursuing a payment plan. Individuals who have predictable income sufficient to pay their reasonable expenses with some amount left over to pay off their debts are those who find Chapter 13 the best option.
