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The Curious Bag
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In general, bankruptcy means that a person's assets are turned over to a trustee and used to pay off outstanding debts. Chapter 13 bankruptcy is a court-monitored payment plan for debtors to repay creditors under the supervision of a trustee.
Qualifications
The eligibility requirements for filing a Chapter 13 bankruptcy include having a regular income, unsecured debt that is less than $336,900 and secured debt less than $1,010,650. Also, an individual must have received credit counseling within 180 days before filing.
Benefits
Benefits include consolidated payments to a trustee as opposed to paying creditors. Another advantage is that secured debts can be rescheduled to be paid off over the life of the plan. Other benefits include no contact with the creditor by the debtor, and co-signers won't be liable for a debtor's arrears.
Filing
In order to properly file for bankruptcy, a debtor must file a petition in court. Documentation includes a statement of assets and liabilities, financial records, unexpired leases, tax returns, and a certificate of credit counseling.
Creditors
Once a petition has been filed, then creditors cannot seek to collect debt from the debtor or the debtor's property except under certain circumstances.
Payments
Debtors must begin making payments to a trustee within 30 days of filing.
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