When a person decides to reorganize debt under the guidance and protection of the court, he or she will file for chapter 13, which is a U.S. bankruptcy proceeding. When the court agrees to the reorganizational plan, it can last for a period not exceeding 60 months but usually is set for settlement in 36 months. Once the plan has been completed successfully, any remaining debt is discharged. You really will need to talk to a chapter 13 attorney in Mechanicsburg before you file as it is not for everyone.
Chapter 13 can be considered worse for a person’s credit than chapter 7 because the bankruptcy period is considerably longer, however electing chapter 13 over chapter 7 bankruptcy still has valid reasons.
* The significant reasons to choose chapter 13 are:
* To save your home from being foreclosed upon
* The protection of a non-exempt asset
* Previously filed for Chapter 7 in the last eight years
* Federal and state tax liability
* Automobile repossession threat
* Student loans and back child support
* The amount of disposable income
A chapter 13 bankruptcy allows the debtor the opportunity to re-arrange their debts and pay all those that are non-dischargeable. This allows the debtor to protect his assets. A chapter 13 bankruptcy is not feasible if the debtor does not have a stable, regular source of income and the debts have to have a specific cap on them.
The procedure for filing chapter 13 is the same as it is when filing chapter 7 bankruptcy. The debtor arranges a meeting with a chapter 13 attorney in Mechanicsburg; the attorney files the case, and the automatic stay comes into effect immediately. The debtor attends a meeting with the creditors and after 30 days, he or she begins to make payments in accordance with the plan that was developed and agreed upon by all. These monthly payments carry on until the end of the plan, usually 36 months but never any longer than 60 months. At the end of this period the bankrupt is discharged.
As with chapter 7, the law demands that the bankrupt take two classes in financial management, the first class is called Credit Counseling. This class must be taken before a chapter 13 petition can be issued with the court. The idea of the class is to assist debtors evaluate the extent of their debt and financial situation. Debtor Education, the title of the second class, and this must be taken to be discharged. This class helps the debtor post-bankruptcy and is intended to guide the bankrupt with his financial future.
Chapter 13 requires a chapter 13 attorney in Mechanicsburg due to the complexity of the case. There are limitations, which include very close control over the budget and any debts that arise after bankruptcy occurs must be kept up to date.
If you are drowning in debt and feel that the only road to a fresh start is to meet with a chapter 13 attorney in Mechanicsburg then you are invited to call the law offices of John M. Hyams.
