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Chapter 13 bankruptcy
Eligibility: To be eligible to be a chapter 13 debtor, individuals must meet, among other things, the following two requirements: (i) they must have a regular income, and (ii) their debts must not exceed a certain amount. If the individual's current monthly income is less than the applicable state median income, the plan will generally be set up for three years, although the court may approve a longer plan. If the debtor's current monthly income is greater than the applicable state median, the plan is generally for five years.
Chapter 13 Advantages:
- Opportunity to save a home from foreclosure
- Provide for cure of debtor's mortgage payment over time
- Provides protection for third parties such as co-signors who are liable with the debtor on consumer debts
- Acts much like a consolidation loan
- Creditors are prohibited from engaging in collection activity for debts that arose before the bankruptcy filing
Learn more about Chapter 13:
The information contained on this website regarding bankruptcy is intended as an overview and is not intended to be comprehensive. Further, it is for informational purposes only and is not to be considered legal advice. You should consult with an attorney for advice about your specific legal situation
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