Guide to Chapter 13 Bankruptcy Claims
Filing a Chapter 13 bankruptcy may offer people a flexible way to file a bankruptcy. This type of bankruptcy differs really greatly from a Chapter 7 bankruptcy. Through a Chapter 13 bankruptcy, debts can be consolidated in order to create a repayment plan that permits someone to repay debt with lower or no interest. A Chapter 7 bankruptcy includes the liquidation of debts, whereas a Chapter 13 bankruptcy simply involves the restructuring of debts. In a Chapter 13 bankruptcy, the debtors region permitted to retain ownership over their properties. A plan is created that forces the debtors to repay the debt without interest.
The plan details the definite time period of when the payments should be made and the duration of the whole program. After the case has started, the person filing the situation has 30 to 45 days to start repaying the debt involved in the case. Even if lenders disagree with the plan that's been created, the repayment plan may continue legally as long as the Court has OK'd the plan. Normally, the repayment plans last for approximately thirty six months. However, if additional time is requested they could last up to 60 months. If you make every payment, then at the end of your plan, any debt that is unpaid will be discharged from your repayment plan. This can present a major relief to individuals stuck in mounting and overwhelming debt.
If you miss any of your payments throughout a Chapter 13 plan, then the Court will immediately dismiss your case. This can be a severe disadvantage that creates many more complications in your situation. As far as your credit score goes, the bankruptcy will appear on reports for up to 7 years after your situation. This is much better than a Chapter 7 bankruptcy, which has a far more bad impact on one's credit score. There still are conditions that should be met in order for someone to be able to file a Chapter 13 bankruptcy. One of the most critical factors is that a person must've a normal salary.
For students in particular, they may face difficulties in trying to file a Chapter 13 bankruptcy without having a normal income. Additional requirements include having liquidated and unsecured debts that don't surpass a certain amount and secured debts that don't surpass a certain amount. There are some other significant differences between Chapter 7 bankruptcies and Chapter 13 bankruptcies. A Chapter 7 bankruptcy may only be filed once every 8 years. Overall, some other basic tips to keep in mind when dealing with Chapter 13 bankruptcy is to stay organized and consult an attorney if you aren't sure whether or not you should file. This article isn't intended to be professional legal suggestions. If you still have concerns regarding Chapter 13 bankruptcy, be positive to seek the suggestions of a professional lawyer.
