Chapter 13: The Steady Road Back To Freedom
Chapter 13 is an alternative for individuals filing for bankruptcy. This bankruptcy lasts until a debt repayment plan has been completed, which can take several years. Typically, you will only have to pay unsecured creditors a small percentage of what is owed. However, some back taxes must be fully paid, as well as past due balances on secured debt (such as a car loan or a mortgage). Under Chapter 13, individuals filing for bankruptcy may get to keep their car or home even if they have become delinquent on those loans.
One of the major advantages of filing for bankruptcy under Chapter 13 is that if you have a second mortgage or equity line of credit on your home, this can be discharged and you never have to pay another dime on this debt.
How Long Does a Chapter 13 Bankruptcy Take?
A Chapter 13 bankruptcy continues for the duration of a debt repayment plan, which usually lasts between three to five years. At the completion of a successful Chapter 13 bankruptcy, most of the debts are discharged, meaning the person no longer has to pay anything further on the debt.
How Does a Chapter 13 Bankruptcy Work?
The first step in filing for Chapter 13 bankruptcy is to put together a payment plan. Details that should be in the plan can include how much each creditor gets, how long the plan will last, the value of the individual’s property and so on.
After filing for Chapter 13, a court-appointed trustee will call for a (non-optional) meeting of creditors. At the meeting, the trustee or creditors may question details of the plan put forward.
A confirmation hearing is held soon after the meeting of creditors. This is where the court formally approves your Chapter 13 plan. For full details of both of these meeting, scroll down and read on.
Once the plan has gotten court approval, the payment plan must be carried out before the Chapter 13 bankruptcy is completed. This is usually the longest part of the process.
Filing for Chapter 13 bankruptcy can be a long and complex process. Each person’s unique financial situation makes every filing unique. Get in touch with Dowe Law today and let them help you through the bankruptcy process quickly, easily and without fuss.