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Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a repayment plan that protects the debtor from collection action during the case and discharges any unpaid balance of dischargeable debts at the end of the plan.
Chapter 13 permits the debtor time to pay debts that can't be discharged in either chapter, like recent taxes or back child support; to cure defaults on home mortgages; and to eliminate liens to the extent the contract balance is greater than the value of the asset.
Who should consider Chapter 13?
Debtors choose to file a repayment plan under Chapter 13 when
- they owe debts not dischargeable in Chapter 7 ( such as taxes, child support, fraud judgments)
- they have liens that are larger than the value of the assets securing the debt
- they have years of unfiled taxes
- they are behind on car or house payments
- their assets are worth more than the available exemptions
- their income may trigger a substantial abuse objection
Payments through the plan
The debtor must make the first payment on the plan within 30 days of the filing of the plan and each month thereafter. Payments begin before the first meeting of creditors and continue even while objections to confirmation are pending. Payments must be made in certified funds, such as money orders or cashiers checks, or by voluntary wage deduction.
Chapter 13 Bankruptcy Plan Confirmation
If you filed a Chapter 13 plan will need to attend a hearing before a bankruptcy judge who will either confirm or deny the repayment plan. If your plan is confirmed and you make good on it, the balance (if any) on the dischargeable debts you owe will be eliminated at the end of your term.
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