Chapter 13 Bankruptcy Definition

By: Marcus Peterson
Submitted: 2007-01-17 16:17:34
Print this article | Tell a friend | For publisher | Social Bookmarking
Rating:
 

Chapter 13 bankruptcy is a method employed by consumers who have debts and are not in a position to pay them back. It is a way for them to restore their financial status and get back to a zero balance.

Bankruptcy is a legal process whereby a creditor files for it in a court of law, expressing his inability to pay his debts. Chapter 13 bankruptcy is usually called the reorganization bankruptcy. It is a debt that is filed by consumers who wish to pay their debts within a period of three to five years. It is a strategy that helps individuals to keep some of their possessions such as their homes and at the same time have a means of financially meeting their usual living expenses.

A consumer presents a bankruptcy petition before a court, listing his schedule of assets and liabilities. After this, the person filing for bankruptcy presents a repayment plan, which is meticulously reviewed by the creditors to check whether it meets their needs. After taking stock of objections and making amendments, both the parties follow this reorganization plan.

However, there are other additional confirmation tests that remain before the reorganization of bankruptcy. A part of this is a test to compare amounts that the creditors would receive if they were to follow Chapter 7 bankruptcy. This test is meant to confirm that creditors should receive the same amount from both Chapter 7 and Chapter 13 bankruptcy. Another test requires the applicant to pay all their disposable income to the repayment plan as well.

Chapter 13 helps those people who are interested in keeping an important possession, such as one?s home. An example is a person who has missed many house payments and is scared of receiving a foreclosure. This individual can halt the same by filing for Chapter 13 bankruptcy. This is usually referred to as ?automatic stay? and allows time for a consumer to catch up on missed payments.

Chapter 13 bankruptcy is thus quite helpful. However, one important aspect one needs to keep in mind before filing is that a consumer?s credit record suffers a 10-year black listing where it becomes extremely difficult to secure a loan when one is needed.

Chapter 13 provides detailed information on Chapter 13, Chapter 13 Bankruptcy, Chapter 13 Trustee, Filing Chapter 13 and more. Chapter 13 is affiliated with Filing Bankruptcy.

Article source: Expert Articles

Most Recent Articles in Bankruptcy category

  • How to Avoid Bankruptcy - By: Justin Narin
    Bankruptcy offers some people a clean slate, it is by no means an easy solution. Bankruptcy will destroy your credit and may possibly force you to sell your assets. If you want to preserve your credit, you will be much better off if you do whatever you can to avoid bankruptcy.
  • Make Filing for Bankruptcy a Last Resort - By: Lee Bell
    There are 2 main types of bankruptcy. If you can't avoid bankruptcy, determine between Chapter 7 and Chapter 13.
  • Life after bankruptcy is not so difficult - By: Jason Holmes
    "Avoid bankruptcy" is the most common phrase; we come across in our everyday life. There are several disadvantages of bankruptcy. But if you are bankrupt, it is not very difficult to swim out of the situation.
  • Achieving Financial Security in an Unreliable Economy - By: Mohan Mittal
    Financial Security is a false concept that developed in American society based on the idea that security comes from the perceived reliability of a regular or planned paycheck. Many people, believing in the commitment of their corporations to their well-being, have found themselves downsized, layed-off, outsourced, transferred, or, in some cases, even fired. The immediate reality becomes harshly apparent and sadly disappointing.
  • Bankruptcy - Is it the Last Option Only? - By: Michael Killian
    Bankruptcy is available when all other debt payment measures have failed and the unpaid debt is simply beyond the means of the consumer to repay. It is essential, then, to understand debt options prior to bankruptcy and to determine which debt repayment method is the least detrimental. Additionally it is the law of the land that you know your debt repayment options prior to bankruptcy.
  • It’s Official; We Are Now A Bankrupt Society? - By: Stephen Morgan
    The Government’s Insolvency Service claimed that 27,644 people were either made bankrupt or entered into an Individual Voluntary Arrangement (IVA) as a way to control or manage their debts in an ordered fashion.It was too early obviously to know how big a percentage of those who entered into an IVA had it failed by their manager or supervisor but it has been claimed previously that in some cases up to 50/60 percent of those entering an IVA fail to complete it in an orderly manner and therefore find themselves being made forcibly bankrupt at a later date.The other key statistic was that insolvencies were apparently 55% higher than during the comparable period this time last year and the smart money (to spoil the metaphor) is on the figure topping the 100,000 mark for the year.
  • Considerations Before Filing Bankruptcy - By: Jon Arnold
    Financial difficulties can occur in anyone’s life. When you think financial difficulties are more than you can handle, don’t let bankruptcy become your first thought. Bankruptcy should be considered as a last resort, not just the first thing that pops into your head when the going gets tough.
  • People on Benefits No Longer Eligible for an IVA - By: Diana Middleton
    The BBC has reported that people on UK state benefits will no longer be given an option of taking out an IVA to help pay off their debts.In an IVA or Individual Voluntary Arrangement people negotiate a repayment plan with their creditors with an Insolvency Practitioner acting on their behalf. Up to 80% of their debt is written off and interest on debt is frozen.
  • How Do Bankruptcy Loans' Requirements Work? - By: Kate Ross
    Bankruptcy loan’s qualification is not an easy task. You need to overcome serious lender’s wariness about your ability and disposition for repaying the loan you are requesting. At this stage, you need to make no mistakes, your behavior has to be stainless and you need to show the lender that the past problems that led you to bankruptcy exist no more.
  • Bankruptcy Can Be Used As An Opportunity To Start Over And Reset Your Financial Goals - By: Jon Hansen
    Bankruptcy is the last resort that neither the borrower nor the creditor wishes to meet. The impact of this to both sides is negative and long-lasting. Once you are bankrupt, it will remain on your credit report for many years, making it difficult to get any loan, insurance, or a job.