What is Chapter 13 bankruptcy and what are the advantages and disadvantages? Filing Chapter 13 bankruptcy can you get if you do not have all your attempts to get rid of your debts. With the help of Chapter 13, you can avoid foreclosure and also pay part or all of your debts within a certain time, it usually takes 3-5 years to repay your debts manifold. Chapter 13 is also called the bankruptcy or reorganization plan an employee. If you need to file Chapter 13? Filing Chapter 13 will be useful if you experience one or more of the following situations. • You want to protect your assets from liquidation. • Do you pay your debts safely. • You can not pay your mortgage payments. • Your property lien is greater than the value of your relatives. • You will not be able to pay its debts by filing Chapter 7 bankruptcy. • Your income is higher than what is needed for filing Chapter 7. What are the criteria to be eligible? Need to meet several factors to qualify for filing Chapter 13. The eligibility criteria are as follows. • You must have a regular income so you can make your monthly repayments. • You must register with a credit counseling session within 6 months before filing for bankruptcy. • Under the rules of bankruptcy, you should not exceed USD 922,975 USD 307,657 and your secured and unsecured debts respectively. • Gross monthly income you must be above the state median income by family size. • You can not file Chapter 13 within two years from the previous presentation, you must wait four years if you file Chapter 7 before. How does the Chapter 13 Bankruptcy? Like a loan, you must prepare a payment plan with the proposal and attach your documents from any Chapter 13 bankruptcy. Then, you must submit your proposal to all creditors. Your payment plan should be composed of all your debts, the claims of priority with your secured and unsecured debts. What are the advantages and disadvantages of filing a Chapter 13? The advantages and disadvantages of filing a Chapter 13 are as follows: Advantages: • It will stop any legal action against you. • You can get rid of some of your debts. • You can save your property and personal. • You can repay your debt through a structured payment plan. • You receive calls without your creditors or collection agencies. Disadvantages: • It will remain on your credit report for 7 years. • Your credit score can go down by 200-250 points. • You need to bring the cost of hiring a lawyer and a manager. • You must pay the regular fee for filing Chapter 13. It is very important to the documentation required under the direction of an experienced bankruptcy attorney for each court has the right to dismiss your case if there are errors in your papers.
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