Within the American bankruptcy system, there are three common types of bankruptcies that may be declared. These are Chapters 7, 11, and 13. Chapter 7 involves liquidating your assets to satisfy creditors, and Chapter 11 is mostly aimed at businesses and some types of farms. If you are dealing with personal debts and don't want to see your assets liquidated, a Chapter 13 bankruptcy filing is likely to offer the most appealing avenue.
You'll probably have questions about what Chapter 13 is and how it might apply to your situation. This article will dig into the details in order to help you learn more about the process.
The biggest feature of Chapter 13 bankruptcy that distinguishes it from other kinds of filings is that it buys a debtor time to settle up with their creditors. These types of proceedings take between three and five years to complete, and there is an option in some instances to discharge any remaining debts once a plan is completed and all payments have been rendered.
Primarily, though, Chapter 13 is about restructuring your debts with the goal of paying as much of them off as possible. For this reason, Chapter 13 filings are sometimes chosen by folks who are trying to halt foreclosure on their properties. A stay is automatically entered that also limits creditor harassment.
Notably, you will have to provide the court with evidence that you actually have sufficient income to pay these debts down in a timely manner once they have been structured. Should you be able to complete payments sooner, you will have the option to have the case closed out entirely. It is also possible for debtors to elect, if they can't complete payments, to convert their cases into Chapter 7 filings.
Under current laws, a debtor may only pursue Chapter 13 bankruptcy if they have less than $394,725 in unsecured debt. This amount is adjusted, usually upward, on a fairly regular basis by the government. Secured debts may go up to $1,1854,199, and similar adjustments are made by the government periodically.
You cannot file for a Chapter 13 bankruptcy if you've had a bankruptcy dismissed within the last 180 days due to several reasons. These include violation of a court order, failure to appear in court, or a request by the debtor to dismiss the case after a creditor asked for an automatic stay to be lifted.
Visit websites like http://www.haven-law.com/ to learn more about bankruptcy law.