Chapter 13 Bankruptcy | Andres Montejo Law
Chapter 13 is a reorganization bankruptcy, in which debtors may keep their property but must make installment or monthly payments to their debt in the course of three to five years. Many advantages can be found by filing under Chapter 13 which include, allowing individuals to reschedule secured debts.
Chapter 13 Repayment Plan
When you file for Chapter 13 bankruptcy, you will have to create a repayment plan. A repayment plan will explain in close detail how you will repay each of your debts and how much will be given for each installment. Since there is no formal paperwork or form for the repayment plan, most courts provide their own form. You must show that any remaining income after repaying your secured debts are going to your unsecured debts such as, medical bills, and credit card bills.
Your repayments plan lasts depending on your income and how much must be repaid. If you are not able to finish your repayment plan for reasons such as losing your job six months into the plan, the bankruptcy trustee can adjust your plan, discharge your debts, or convert to a Chapter 7 bankruptcy.
Are you eligible for Chapter 13 Bankruptcy?
In order to file for Chapter 13 bankruptcy, you must prove that you will be able to meet the standards made to repay creditor through instalment payments by having enough income. If you cannot meet the payment obligations then the court might not allow under this bankruptcy. Your secured debts cannot go beyond $1,010,650. Secured debts are debts that allow creditors to seize specific property. For example if you fail to make your car payments, the creditor may take hold of your car. Unsecured debts must be less than $336,900, these debts may include, credit card debt, and medical bills. You must also show proof of filing state and federal income tax returns for the previous four years. If you have filed for bankruptcy you must wait a certain time before being eligible to file again. For Chapter 7 you must wait at least eight years and for Chapter 13 you must wait at least six years.
South Florida Bankruptcy Law Center of Andres Montejo
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