by 
The Curious Bag
-
Chapter 13 bankruptcy is typically designed for wage earners. This plan allows individuals to repay part of any debt owed or the entire debt. The debtor has the opportunity to propose his own repayment plans in which he will make monthly installments until the debt is paid in full.
Eligibility
A debtor must have less than $336,900 worth of unsecured debts and less than $1,010,650 worth of secured debts in order to qualify for Chapter 13. A debtor must also be working or have a consistent source of income in order to set up a repayment plan.
Benefits
The benefits of filing Chapter 13 with the bankruptcy courts is that a debtor is granted an automatic stay, which stops a creditor from taking further collection action against the debtor. This can stop a foreclosure on a home or a car from being repossessed.
Time Frame
The amount of time a debtor is allowed to take to pay his debt off is three to four years under Chapter 13 laws. However, the court has the right to extend the time for the debtor, if needed.
Credit Counseling
Bankruptcy law requires a debtor to seek credit counseling by the United States Trustee in order to file Chapter 13.
Warning
A debtor should be warned that if he misses an agreed-upon payment, the bankruptcy courts have the right to dismiss the case, and he will owe his creditors the original amount of the debt plus any interest that accrued during the bankruptcy.
Source:
RELATED QUESTIONS
Copyright 2023, Wired Ivy, LLC