If you have decided to start filing chapter 13 bankruptcy, it is important for you to make certain that you fulfill the eligibility criteria that have been set by the chapter 13 bankruptcy law. Gone are the days, when the debtor has the liberty to choose the kind of bankruptcy they should go about filing.
Chapter 13 Bankruptcy Benefits:
Contrary to many beliefs, filing a Chapter 13 bankruptcy has many advantages over a Chapter 7 bankruptcy.
- Longer time to Reorganize your Affairs
- Keep Assets that are not exempt in a Chapter 7 Bankruptcy
- You may not have to pay back anything to unsecured creditors
- You can Convert your Chapter 13 to a Chapter 7 Bankruptcy
- You do not need to sign a Reaffirmation Agreement
- Less Scrutiny by the Department of Justice
- You can modify your Chapter 13 plan at anytime
- Repay Back Taxes
- Repay Child Support
- Penalties associated with Willful and Malicious Injury
- Divorce Settlement Obligations are Dischargeable,
Now, especially after the new laws have come into effect, it is no more optional for you. Based on the results of the bankruptcy advice and the credit counseling procedure, the court decides whether you are eligible for filing chapter 13 bankruptcy.
Filing bankruptcy can be a bit of a systematic procedure. You first have to pass a means test and then go through a credit counseling procedure, through a government-approved credit-counseling agency. As per the new laws, it is mandatory for you to go through the credit counseling procedure at least six months before filing. If the output of the means test is more than the median income of the state, the debtor becomes eligible for this process.
If your bankruptcy attorney manages to defend the claim in your favor, the court will allow you to continue with your business operations. The court also appoints a trustee, who will keep a watch on your business operation. Going with a chapter 13 bankruptcy and getting the it granted to you will allow you to get your finances back on track, while paying the debts to the various creditors. The court will suggest to you a repayment plan and you are supposed to make regular payments based on this repayment schedule, in order to your creditors in order to settle their claims.
The greatest advantage for you when filing bankruptcy is that you also get an opportunity to get the claims of the creditors reduced to a much lower amount. For example, the bankruptcy attorney may request the court on behalf of the debtor that the debtor is able to pay only twenty-five cents on each dollar. The bankruptcy court will look into the financial details of the debtor and if it finds things genuine, it may grant the reduced claims. However, most of the times, the decision is taken after certain negotiations with the creditors. For example, if you requested to get the claims reduced all the way down to 25 percent, the court may agree at reducing the claim to seventy-five percent when you go about filing chapter 13 bankruptcy.
Click here for more information about Ch. 13 Bankruptcy from the United States Courts.
An here is some information from NoLo about Bankruptcy.
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~Tina Jan~
DRE# 01505855
Coldwell Banker Kivett-Teeters
1655 E. Sixth St.
Beaumont, CA 92223
Work: 951-845-5520 Ext. 105
Fax: 951-845-4916
Cell: 909-446-2666
Toll-Free: 1-877-TINAJAN
tina.jan@coldwellbanker.com
www.tinajan.com
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