Just as with anything in the legal world, you want to be sure that you understand each step. When you are filing for Chapter 13 bankruptcy, you may have questions about how it will affect your life, as well as what the process of bankruptcy will look like. These are some common chapter 13 bankruptcy questions and answers for you to peruse.
What is the difference between Chapter 13 and Chapter 7 bankruptcy?
The main difference is that in Chapter 7, the property that is not exempt in the bankruptcy, is sold to pay for debts. In Chapter 13 bankruptcy, the future income is used to pay as much of the debt as is feasible over a period of 3-5 years.
How is the debt paid in a Chapter 13 bankruptcy?
A plan will be presented to the court by you and your attorney that will state how much money you will pay to the Chapter 13 trustee, who will pay a certain amount to each creditor. Your trustee takes care of the payments when you make your payments to the court as directed.
What debt can I discharge through a Chapter 13 bankruptcy?
Some debts cannot be discharged through Chapter 13. These include such debts as alimony, child support, court settlements, tax debts, fraud debt, student loan debt, and several other types of debt. Debt that can be discharged are credit cards, medical bills, personal loans, and more.
When will my debt be discharged?
Under Chapter 13 bankruptcy, you will pay a determined amount to the courts, which will be paid to your debtors. A specific amount of time will be set, usually between 3 to 5 years. Once you make payments for this period of time, the remaining debt is discharged and considered by the creditor to be paid in full.
Can Chapter 13 bankruptcy save my home from foreclosure?
Most of the time it can. It can enable you to cure your default and reinstate your mortgage do a pre-default status. This will be done through your Chapter 13 plan, where you will make payments that will reinstate the loan.
Finding answers to your Chapter 13 bankruptcy questions can give you the additional information that you need to make a decision that you will be comfortable with. Whether it is one of these questions or one of the many other common chapter 13 bankruptcy questions, take the time to get your answers.