Chapter 13 Bankruptcy Laws

Chapter 13 bankruptcy laws are different from chapter 7 bankruptcy laws. With chapter 13 bankruptcy laws, not all assets are liquidated or forgiven. The Chapter 13 bankruptcy laws allows a wage earner to repay the debts using repayment plans over the course of 3-5 years.

The advantages of chapter 13 bankruptcy laws

There are many advantages of chapter 13 bankruptcy laws compared to chapter 7 bankruptcy laws. First of all, the provisions of the chapter 13 bankruptcy laws allow some people to save their homes from foreclosure.

Once the chapter 13 bankruptcy is filed, the foreclosure process is halted. Although mortgage lenders could file petitions to proceed with the foreclosure process, most of the time, filing chapter 13 bankruptcy stops foreclosure and allows the debtors to restructure the mortgage loan payments. This can result in lower mortgage payments.

Chapter 13 bankruptcy is debt consolidation

Filing chapter 13 bankruptcy is similar to getting a loan consolidation. The filer proposes a repayment plan under the protection of chapter 13 bankruptcy laws. The trustee distributes the payments to creditors. Individuals filing chapter 13 bankruptcy have no contact with creditors directly.

Who can file bankruptcy under chapter 13 bankruptcy laws?

Under the chapter 13 bankruptcy laws, any individual including self employed persons can file for chapter 13 bankruptcy protection providing the secured debt amount and unsecured debt amount do not exceed a certain limit outline in the chapter 13 bankruptcy laws.