Chapter 13 bankruptcy is also called wage earner’s plan because a regular salary from a stable job can nearly assure the approval when you file chapter 13 bankruptcy.
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According to chapter 13 bankruptcy, the debtor puts forth the creditors a repayment plan to do the payments in installments extended over a duration varying from 3 to 5 years. This is subject to the income of the debtor and the applicable state median. If the income of the debtor is more than the applicable state median the debtor can get rid of the debt within 3 years but if the income is found to be less than the applicable state median then the duration can be extended to 5 years. The duration of repayment cannot be extended over a period of 5 years. The creditors or the lenders have to immediately stop making the collection calls because chapter 13 bankruptcy forbids the lenders or creditors from doing so. The above mentioned Chapter 13 Bankruptcy Information can prove to be of much help to you.
Some of the benefits of filing chapter 13 bankruptcy are saving the home from foreclosure, making current the mortgage payments that you have be delinquent with, re-amortization of secured debts, reduction of monthly payments and making them affordable. The chapter 13 bankruptcy is one way like a consolidation loan because the debtor needs to do just one payment to the trustee who passes it on to your creditors or lenders.
How to file for chapter 13 bankruptcy? Some of the important steps to file chapter 13 bankruptcy are as follows:
- File the petition forth the US bankruptcy court
- Submit the stipulated statements pertaining to financial disclosure and certain other schedules
- Attach with the petition a certificate of credit counseling
- Furnish a copy of any debt repayment plan drafted by an approved credit counseling agency
- Submit the latest paystubs along with other documents especially the copy of filing the tax returns.
The trustee on being satisfied with the justification provided by the debtor recommends the case for approval by the bankruptcy judge. Upon approval of the bankruptcy judge the debtor has to start doing the monthly payments to the trustee who distributes the sum among your creditors or lenders on a “pro rata” basis. It is always better to have a bankruptcy consultation with a company like before filing for bankruptcy.