Chapter 13 Bankruptcy - A More Grace-Filled Alternative
If you talk to bankruptcy experts, most will tell you that the question they see most often is which bankruptcy chapter an individual should file under: Chapter 7, or the less invasive, Chapter 13. When it comes to Chapter 13 bankruptcy laws, the biggest difference between Chaps. 7 and 13 is that a filing under Chapter 13 is more in line with a debt realignment plan. The debt is not so much erased as it is re-ordered along with an agreement schedule to eventually pay it off. Think of it this way: In Chapter 7, your creditors may or may not see their debt repaid, while in Chapter 13, the odds are more in their favor. So, according to Chapter 13 bankruptcy laws, both parties involved, the creditor and the debtor, are more than likely to end up in a better financial situation. One of the key components of being able to file under Chapter 13 bankruptcy laws is the issue of a few rules to follow. For example, Chapter 13 requires the person filing to be gainfully employed in order for the agreed upon payments to be made. These payments are typically a percentage of the debtor's total debt amount that the bankruptcy court then disburses to creditors. Another key component in order to qualify under Chapter 13 bankruptcy laws relates to necessary living expenses. Under the law, there will be a form to be completed where every primary living expense you need to cover before the bankruptcy trustee can disburse funds needs to be listed. These basic expenses include, but are not limited to the following: Housing or rent payments, food bills, insurance bills, any type of child support payment, and other primary loan arrangements. It is very important to note that while providing your listings under basic living expenses that you include only the basics as each item be tightly scrutinized by the bankruptcy trustee. In other words, health club memberships for your dog and premium satellite TV will probably not pass. In conclusion, Chapter 13 bankruptcy laws are designed for debtors who are carrying a large amount of debt that is not considered erasable under Chapter 7; debtors with large amounts of personal assets they do not wish to liquidate; and debtors who are currently in arrears with mortgage or automobile repayments and wish to keep their property. The laws work very well and have been a saving grace for many people who have found themselves in difficult financial times. |
