When someone files for bankruptcy under Chapter 13 of the Bankruptcy Code, their aim is to have the opportunity to repay some or all the debts in their name, in better terms, i.e. lower or no interest. Unlike Chapter 7 which involves liquidation of assets, this process allows the debtor to use whatever income they may have in the future to pay off the creditors. Needless to say, filing Chapter 13 Bankruptcy is applicable for a debtor who does have a regular income, and thus can afford to request for such adjustments, or reductions.
The United States Bankruptcy Code gives the debtor a ceiling of 5 years, within which the creditors must be paid back. While the attorney will safeguard your interests, the entire process is carried out under the supervision of the courts.
How Does Chapter 13 Bankruptcy Work?
While debtors are allowed to keep all of their property, the court approves a new interest-free plan for repayment. A written plan is created giving details of all the transactions that will occur, and the duration of the same. The repayment must begin within thirty to forty-five days after the case has started. The transitory stage of paying a trustee who then pays a creditor, as in Chapter 7 Bankruptcy is usually eliminated with Chapter 13 Bankruptcy. Although, in some cases people may involve a trustee who would take care of disbursing money to the creditors as per the plan. Also, as per the law the creditors must strictly adhere the repayment plan approved by the court and are in fact prohibited to collect any claims from the debtor. Your attorney will prepare new repayment plan to best suit your situation.
Who Can File For Chapter 13 Bankruptcy?
The most important criteria for a person to be able to file for Chapter 13 bankruptcy is that the individual must have a regular income. There are a few other criterions that must be met for filing a Chapter 13 Bankruptcy, your attorney will be the best person to introduce you to these!
Call for a consult today: 303-650-5467
Lois Tabberson Gray, P.C.
11971 Quay Street
Broomfield, CO 80020
Phone: 303-650-5467
Fax: 303-429-7574
Or email us for more information!