Guide to Chapter 13 Bankruptcy Claims
Filing a Chapter 13 bankruptcy may offer people a flexible way to file a bankruptcy. This type of bankruptcy differs really largely from a Chapter 7 bankruptcy. Through a Chapter 13 bankruptcy, debts may be consolidated in order to create a repayment plan that permits somebody to repay debt with lower or no interest. A Chapter 7 bankruptcy involves the liquidation of debts, whereas a Chapter 13 bankruptcy simply involves the restructuring of debts. In a Chapter 13 bankruptcy, the debtors are permitted to retain ownership over their properties. A plan is created that forces the debtors to repay the debt without interest.
The plan specifics the exact time period of when the payments should be made and the duration of the entire program. After the case has started, the person filing the situation has thirty to 45 days to start repaying the debt involved in the case. Even if lenders disagree with the plan that has been created, the repayment plan can continue legally as long as the Court has OK'd the plan. Normally, the repayment plans last for approximately thirty six months. However, if additional time is requested they can last up to sixty months. If you make every payment, then at the end of your plan, any debt that's unpaid will be discharged from your repayment plan. This could present a significant relief to people stuck in mounting and overwhelming debt.
If you miss any of your payments throughout a Chapter 13 plan, then the Court will immediately dismiss your situation. This can be an extreme disadvantage that creates many more complications in your situation. As far as your credit score goes, the bankruptcy will appear on reports for up to 7 years after your case. This is much better than a Chapter 7 bankruptcy, which has a far more negative impact on one's credit score. There still are conditions that must be met in order for someone to be able to file a Chapter 13 bankruptcy.
One of the most important factors is that a person should have a regular income. For students in certain, they may face hardships in trying to file a Chapter 13 bankruptcy without having a regular income. There are some other significant differences between Chapter 7 bankruptcies and Chapter 13 bankruptcies. A Chapter 7 bankruptcy could only be filed once every eight years. Overall, some other basic tips to keep in mind when dealing with Chapter 13 bankruptcy is to stay organized and consult an attorney if you're not positive whether or not you should file. This article is not intended to be professional legal advice. If you still have concerns concerning Chapter 13 bankruptcy, be sure to seek the suggestions of a professional attorney.
