The Nuts And Bolts Of Ch 13 Bankruptcy
If you are experiencing trouble repaying your debts, are seriously behind on paying your debts, and are looking for a way to get some relief and clear up your debts then you may want to declare Ch 13 Bankruptcy. Ch 13 Bankruptcy is similar to a debt consolidation plan in that you make arrangements for a payment plan to pay off your creditors.
There are many pros to declaring Ch 13 Bankruptcy. First of all, you will have the opportunity to save your home from foreclosure. Unfortunately, with Ch 7 Bankruptcy your home is subject to foreclosure. Of course, you will need to continue making regularly scheduled mortgage payments while within Ch 13 proceedings. Another advantage of Ch 13 Bankruptcy is that you will be able to reschedule your debts and pay them out over a period of three to no more than five years.
If you make less than the median income allowed by law, you will be put on a plan to pay out your debts over three years. However, if you make more than the median income, you will have a payout plan of five years. Be advised that federal law prohibits a payout plan to last longer than five years. During the time of your payout plan under Ch 13 Bankruptcy, bill collectors are not allowed, by law, to contact you and make collection efforts.
Creditors are notified by the Ch 13 Bankruptcy court clerk that you have declared Ch 13 Bankruptcy. The clerk will notify all creditors of whom you have provided the names and addresses for in writing. The way your creditors get their money is via a Ch 13 Bankruptcy trustee who handles the collection of your money and applies it to your accounts for you. Under Ch 13 Bankruptcy, you will not be responsible for directly paying your creditors. In fact, you will not need to have any communication with your creditors at all. One convenient way for you to handle the payments to your creditors is to have a payroll deduction enacted. This is an option to you. However, it is one that will guarantee the timely payment of your debts and will reduce the risk of you losing your Ch 13 Bankruptcy status. If your Ch 13 Bankruptcy status is revoked, it may change to Ch 7 status. To file for Ch 13 Bankruptcy, one must provide the court with several pieces of information. First, you must provide a list of every creditor you have, what type of creditor it is and the full amount you owe the creditor. You must also provide where you work, how much you get paid and when you get paid. In addition, you must provide a list of your property and a detailed list of your monthly living expenses.
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