Bankruptcy Chapter 13
Chapter 13 is different than chapter 7 bankruptcy. In this there is no liquidation of the assets, instead the debtor is a regular wage earner and just wants some time to repay the debt in part or full in a certain period of time. A small business proprietor can also file a chapter 13 bankruptcy. The cost of chapter 13 bankruptcy is 189 dollars. Chapter 13 as mentioned is specifically designed for people who earn a regular income and are ready to pay the creditors. Also there is certain criteria to file for chapter 13 bankruptcy which states that one can file only after it is visible that your debts do not exceed beyond the limit set by the code.
In chapter 13 even the fraud debts are considered to be exemptible unlike Chapter 7, otherwise the same debts that are not exempted in chapter 7 are retained non exemptible in chapter 13. The chapter 13 filer has to come up with a plan which should have a proper listing of how one is going to pay his creditors for the debts and as to how can he utilize his future income to nullify him from the debts. The trustee looks over the plan and studies it thoroughly to test the feasibility. The court then approves the plan to take effect. The bankruptcy filer then pays on monthly basis to the trustee of his case. The trustee in return makes the payment of the creditors according to the plan.
The payment plan can be of three to five years. A single delay or failure to make the payment on time may lead to dismissal of the case. The court shows no mercy and maybe the debtor will have to pay for the whole debt that was on him before filing bankruptcy. The chapter 13 bankruptcy too stays on the credit report of an individual for 10 years. It has been found that most of the chapter 13 bankruptcy cases are dismissed due to failure to make payments on time. Ratio shows that only 10% people are able to get successful discharge from a bankruptcy court.
Useful Links
[Filing Bankruptcy] | [Chapter 7 Bankruptcy]
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