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What is a Chapter 13 bankruptcy?
Chapter 13 is a reorganization of debt. The debtor pays back creditors through a monthly "plan" payment handled by the bankruptcy trustee. Generally, the duration of the plan ranges from 3 to 5 years.
Who can file a Chapter 13 bankruptcy?
The same filing requirements apply to Chapter 13 debtors as to Chapter 7 debtors, with some differences. Normally, the Chapter 13 debtor must have a steady income and his/her secured debts cannot exceed approximately $850,000 and his/her unsecured debts cannot exceed approximately $250,000.
What are the most common reasons for filing a Chapter 13 bankruptcy?
Generally, a person files for a Chapter 13 bankruptcy to keep real property which payment is in default (i.e., stop foreclosure proceeding). Under a Chapter 13 plan, the debtor will be able to pay all back payments over a period of time (three to five years).
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