Chapter 13 Bankruptcy
Chapter 13 gives the debtor the opportunity to reorganize its finances and create payment plan in accordance with the debtor's current financial situation. Often a debtor will file for Chapter 13 is often to allow the debtor to keeps her home, when the value of the debtor's home exceeds the amount which is "exempt" in Chapter 7. Chapter 13 allows the debtor's to keep her home while lifting the burden caused debt which the debtor cannot present pay.
The reorganization can propose various action, including modifying some mortgages and car loans to the value of the collateral and reducing the interest rate, paying down taxes that would not be discharged in Chapter 7, and discharging unsecured debt. Litigation may also be involved in objecting to claims or suing to recover assets to fund the plan.
A meeting is held with the Chapter 13 trustee whose responsibility it to ascertain the debtor’s disposable income so as to maximize the amount which creditors received while creating a reorganization plan. While a Chapter 13 reorganization does not wipe out all debts, it is based on the debtor's ability to pay based on disposable income. Generally, a plan is confirmed within three to four months after the meeting, with the debtor’s attorney negotiating objections from the Chapter 13 trustee who will make a recommendation for plan approval to the court.
Under a reorganization plan, the debtor makes payments to the court for three to five years, depending on the specific plan confirmed. Again, this plan is based on the debtor's ability to pay these debts based on her disposable income. Upon completing of payments, the court issues an order discharging the bankruptcy.
The reorganization can propose various action, including modifying some mortgages and car loans to the value of the collateral and reducing the interest rate, paying down taxes that would not be discharged in Chapter 7, and discharging unsecured debt. Litigation may also be involved in objecting to claims or suing to recover assets to fund the plan.
A meeting is held with the Chapter 13 trustee whose responsibility it to ascertain the debtor’s disposable income so as to maximize the amount which creditors received while creating a reorganization plan. While a Chapter 13 reorganization does not wipe out all debts, it is based on the debtor's ability to pay based on disposable income. Generally, a plan is confirmed within three to four months after the meeting, with the debtor’s attorney negotiating objections from the Chapter 13 trustee who will make a recommendation for plan approval to the court.
Under a reorganization plan, the debtor makes payments to the court for three to five years, depending on the specific plan confirmed. Again, this plan is based on the debtor's ability to pay these debts based on her disposable income. Upon completing of payments, the court issues an order discharging the bankruptcy.