Chapter 13 bankruptcy is a type of bankruptcy in which an individual debtor is allowed to keep all or most of their assets while making payments over a period of time. The payments are usually made to a trustee who, in turn, distributes the funds to creditors. The debtor is usually allowed to keep their home, car, and other personal property while making the payments. If you are looking for more tips, check out https://www.portlandconsumerlawyer.com/chapter-13-bankruptcy
Chapter 13 bankruptcy is often referred to as a “wage earner’s plan” because it is designed to help individuals with a regular income to get back on track with their financial obligations. The goal is to help the debtor pay back some or all of their debts and avoid foreclosure or repossession of their assets.
When filing for Chapter 13 bankruptcy, the debtor must submit a plan that details how they will repay their creditors over the course of three to five years. The plan must include details about the amount of money that will be paid to each creditor and when the payments will be made. The plan must also explain how the debtor will manage their expenses and how they will be able to make their payments on time.
In addition, the debtor must also provide the court with a list of their assets and liabilities. This information is used to determine the debtor’s disposable income, which is the amount of money that can be used to make payments to creditors. The court will also consider the debtor’s ability to pay and the best interests of their creditors.
Once the court approves the Chapter 13 bankruptcy plan, the debtor must make their payments as scheduled and follow the other terms of the plan. If the debtor fails to make their payments, the court may dismiss their case, which can have serious consequences.
Chapter 13 bankruptcy can be a great option for individuals who are struggling with debt but want to keep their assets. However, it is important to remember that filing for Chapter 13 does not guarantee that all of the debtor’s debts will be discharged. In fact, some debts, such as student loans and taxes, cannot be discharged in Chapter 13 bankruptcy. Furthermore, if the debtor fails to make their payments, they may still be liable for their debts.
For these reasons, it is important to speak with an experienced bankruptcy attorney before filing for Chapter 13 bankruptcy. An attorney can help the debtor understand their rights and obligations and make sure that they are filing for the right type of bankruptcy.