The Chapter 13 is a kind of bankruptcy that is used for filing in the US. This term is also known as “debt reorganization”. This choice of filing for bankruptcy is better option for those who can be able to pay back the debts in partial. It is also better for those who attempt to keep the movable or immovable properties such as car or home.
Steps to be taken prior to chapter 13 bankruptcy
To file for chapter 13 you will need to visit a court approved credit counselor. There you will have to disclose the detailed information about the debts you own. The credit counselor also needs to know the detailed account of monthly expenses which must also include the amounts you pay on the mortgages and car payments. The counselor will prioritize your debts and channelize the money left over to repay them in full. Those debts which go in the properties which would eventually lapse if not paid in full come second in the list of the prioritization. This list excludes mortgage though. The unsecured debts such as credit cards get the lowest priority.
Benefits of chapter 13 bankruptcy
The chapter 13 bankruptcy forgives some debts if the repayment of the debt is done successfully within 3-5 years. It also prevents people who you owe money from suing you as soon as you file the Chapter 13 bankruptcy. They can’t even harass you over the phone anymore.
Limitations of chapter 13 bankruptcy
The chapter 13 doesn’t protect your home against possible losing if your home is in foreclosure and you fail by any chance to file before the date of the foreclosure. There is also limitations of your movement with respect to the amount of the debt that you will be able to possess if you are keen to file bankruptcy. The flexibility in secured debt is slightly over $900,000 USD and $300,000 USD in the unsecured debt. Though the above amount is subjected to change with time and fresh rules. The chapter 13 is generally not workable for those whose incomes are not adequate enough to pay the debt.
Online professional help for chapter 13 bankruptcy
There are many law firms who provide online professional help for chapter 13 filing. They are available 24 hours a day. For more information kindly search the net.
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Busby & Associates is law and bankruptcy firm that offers divorce lawyers, Houston Bankruptcy attorney, family law and more legal services. Know more about Chapter 13 Bankruptcy by bankruptcy lawyers in Houston.