Chapter 13 Bankruptcy : Some vital tips to remember always

By: Article Submitter

Filing a bankruptcy under the chapter 13 is very beneficial in various manners. When a bankruptcy application is filed under chapter 13, applicant is allowed to stop a foreclosure and may pay off his mortgage payment over the time.

The basics of chapter 13 bankruptcy:

When an individual files for the Chapter 13 bankruptcy, he or she gets an opportunity to repay some of the debts with some favorable terms like lower or no interest very unlike to the Chapter 7 where debts are restructured and assets are liquidate regardless of the income used to pay off the creditors. Chapter 13 thus applicable for those debtors who have regular income and are able to pay the bankruptcy adjustments.

If rules are to be visualized, The United States Bankruptcy Code allows a time shield of five years for creditors to pay the debt money back. The entire process of the bankruptcy is carried out with optimum supervision of the court and under an attorney's guidance.

Chapter 13 bankruptcy filing process

When an individual moves to file chapter 13 bankruptcy, he needs to pay an amount for the court charges and also a case filing fee as miscellaneous fee. This accumulated fee is can be paid this fee in a maximum of four installments or within 120 days of filing of the bankruptcy petition. The process of bankruptcy filing starts with a petition and certificate of credit counseling and the documents having details of assets, income and debts.

In case of Chapter 13 bankruptcy, an individual trustee is appointed to observe the proceedings of the case. After a fortnight of case filing, the trustee arranges the meeting with the creditors where he quizzes the debtors. After the meeting, a crucial plan is developed to pay back the debts to the creditors. To confirm the execution of the meeting minutes, court conducts a hearing to give the decision in order to propose the verdict.

Basic eligibility for the Chapter 13 bankruptcy filling

An individual whether self-employed or running a business is eligible for the Chapter 13 unless the individual's unsecured and secured debts are under a prescribed limit. The applicant can't file bankruptcy application under the act if during the 180 days of preceding, a prior bankruptcy petition was dismissed by the authorities due to the debtor's failure to appear before the court.

Article Source: http://yourfinance.co.za