Chapter Thirteen Bankruptcy
Chapter 13 bankruptcy is referred to as the Wage Earner’s Reorganization. It allows the wage earner to use his income to repay his creditors over a specified time period. To accomplish this, the court creates a payment schedule, whereby the wage earner makes scheduled payments to the creditors over a three to five year payment period.
Some courts might not permit a filing of chapter thirteen. Filings depend on whether or not an individual’s income is adequate to repay part or all of the debt. Courts must establish certify that the income is s table and not too low. Thus, chapter 13 is not suited for everyone.
Other Limitations & Requirements
There are limits to the total debt a person carries to qualify for filing a chapter thirteen. Total secured debt can’t rise above 2,975. Total unsecured debt can’t rise above 7,675. Secured debt is backed up by collateral like a home or a car. Unsecured debt consists of signature loans, medical bills, balances on credit cards etc.
Before proceeding with a chapter 13 filing, all inquirers are required to take a class on personal financial management. This credit counseling course has to be sanctioned by the court trustee. And there is a fee associated with this course. (This fee might be waved in some cases.)
