The United States Bankruptcy Code will give the debtor a time span of 5 years in order to pay your debts off. Whilst the attorney who represents you will safeguard your interests, the entire procedure will be carried out under the court’s supervision.
Whilst debtors are allowed to keep all of their property, considered an asset, the court will have to pre-approve a new interest-free plan for debt repayment. A written plan will be created which will outline all of the expected transactions, as well as the expected duration.
The repayment must start within thirty to forty-five days after the case has begun. You won’t have to deal with the transitory stage of having a middle man do the payment like you might get in a Chapter 7 Bankruptcy. Despite the fact that in some cases people might involve a trustee who would be in charge of paying out the money to the creditors if they wish to do so.
Following the law, the creditors must very strictly stick to the repayment plan that is court approved and they cannot collect any personal claims from the debtor. Your attorney will prepare a new repayment plan that will work best for you.
The one benefit of Chapter 13 over Chapter 7 Bankruptcy is the complete discharge option that isn’t available in chapter 7. For instance, if a debtor is able to complete all of their payments that are set up in the plan, he/she will be given a full plan discharge. Also repayment can be created even if creditors don’t agree with it, as long as it is approved by the Court.
In order to be eligible for chapter 13 bankruptcy, you must have an income which is regular. There are a few other items required for filing a Chapter 13 Bankruptcy. Just ask your lawyer to describe them to you.
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