Bankruptcy Chapter 13
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Bankruptcy is a federal court process used to discharge debt, when an individual or business is insolvent. Through court action property is turned over to a trustee who handles payments to creditors.

There are two forms of bankruptcy:

Reorganization bankruptcy Rehabilitation with a payment plan for individuals with a regular source of income
Liquidation bankruptcy The debtor’s assets are sold off to satisfy creditor claims

In the United States, statutes related to bankruptcy are found in the U. S. Bankruptcy Code. One of six separate types of bankruptcy defined under Title 11, Chapter 13 Bankruptcy helps individuals or small business owners in financial difficulty repay their creditors and get a fresh start.

With a Chapter 13 bankruptcy, the debtor usually repays at least a portion owed to creditors, making payments set up under a plan, usually over a period of 3-5 years. Provided a debtor’s equity does not exceed certain limits, a Chapter 13 bankruptcy allows the debtor to keep property such as his home, vehicle and other assets, which may be exempt according to laws in his state. An added benefit of a Chapter 13 is the time the bankruptcy shows on a debtor’s credit report, which is less than with a Chapter 7, for example. And the time it takes to rebuild a credit rating, following a Chapter 13, is also less.

Most recently, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 initiated changes in the procedures for filing bankruptcy, which involve more stringent documentation and more restrictive qualification requirements. The law now requires individuals seeking bankruptcy relief to undergo credit counseling with approved counseling agencies, prior to filing a bankruptcy petition, and to obtain education in personal financial management from approved agencies before a discharge of debts is granted under Chapter 13.

When you are facing insolvency and wish to seek protection of bankruptcy, you will need the expertise of a bankruptcy lawyer to guide you. Your lawyer can determine if you meet the qualifications to file for Chapter 13, or advise you, if another type of bankruptcy will be of greater benefit to you.

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Bankruptcy Chapter 13
Bankruptcy Attorney