The purpose behind Chapter 13 Bankruptcy filing is rehabilitation of the debtor. Meaning you are given the opportunity to repay some or all of your debts, but under generally better terms (lower or no interest). Rather than having to liquidate assets to pay off debts, this process is designed to allow the debtor to use future income to pay off creditors. Chapter 13 Bankruptcy is basically an adjustment or reduction of debts for a debtor with regular income. |
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In order to file Chapter 13 the debtor must be able to pay monthly living expenses and pay the trustee to consolidate the debt. In order to make these payments the debtor must have a consistent source of income or at least reasonable prospects of future income. Just like in a Chapter 7 Bankruptcy, the individual must live, reside, be domiciled, or have a place of business in the United States. Additionally, the debtor must have a regular source of income and the amount of their debt may not exceed a certain amount.
This whole process is very complicated and recommended the debtor has the advice of a good attorney. Take our Free Online Bankruptcy Evaluation to have an attorney determine if Chapter 13 Bankruptcy is right for you.
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Chapter 13 Bankruptcy Articles 3/16/2005 |
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