Chapter 13 Bankruptcy Law

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What Is Bankruptcy?

Bankruptcy is a federal court process. It is designed to help consumers and businesses eliminate debt or repay debts under the protection of the bankruptcy court. There are two categories of bankruptcy, "liquidation" or "reorganization":

What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

An individual's debts are not discharged under Chapter 13 bankruptcy, but rather, the individual may lower his debt payments to affordable levels. He will then have a certain period of time to pay off his debt. The plan for getting out of debt is formalized and approved by the bankruptcy court. Some unsecured debt (debt that is not collateralized) may be discharged. However, if you owe more than $250,000 in unsecured debt and more than $750,000 in secured debt, you cannot reorganize under Chapter 13; you must do so under Chapter 11. To file for Chapter 13, you must have regular income and debts under those levels.

When Should I File under Chapter 13?

Chapter 13 is recommended if:

Important Features of Chapter 13 Bankruptcy

There are certain important things that the individual (or business) should bear in mind before filing for Chapter 13:

Should I Consult an Experienced Bankruptcy Lawyer?

Compared to Chapter 7, Chapter 13 requires more dedication on the part of the person filing for bankruptcy. Thus, a lawyer can help you decide whether Chapter 13 is the right option for you based on what you may lose under Chapter 7. 

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Last Modified: 02-20-2014 03:30 PM PST

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