Bankruptcy - Chapter 13 Bankruptcy

After the changes in the bankruptcy law went into effect in 2005, many wage earners were no longer eligible for Chapter 7. Under Chapter 13 Bankruptcy, if you have a steady income, you can pay all your debt or a portion of it over three to five years. You must file a bankruptcy petition and propose a payment plan with the Court that allows you to keep your assets while you are paying and after you have completed the plan. Like chapter 7, chapter 13 Bankruptcy also stays on your credit record for ten years.

Whether it is a single or joint case, the limits are as follows: Less than $307,675 in unsecured debts, and less than $922,975 in secured debts. If you had a chapter 7 or 11 discharge within the last four years, or chapter 13 within the last two years, your chapter 13 discharge will not be granted.

As in Chapter 7, you must undergo credit counseling within 180 days before filing. You must obtain a referral to credit counseling agencies from the local bankruptcy court clerk because you need to complete credit counseling before you file. There are different options for counseling; it can be done by telephone, with local groups, or over the Internet.

When you are ready to submit your plan to the court and to the Chapter 13 Trustee, the trustee will first make sure that your plan is accurate and reasonable before distributing it to your creditors. Under this good-faith effort and repayment to the best of your ability the chapter 13 repayment plan often allows you to repay less than you owe. This is because if you can’t fully satisfy all your debts your payments must be taken out all your disposable income that is left after living expenses, taxes, etc. during the three-to-five-year time frame.

If your plan is successfully completed you will be able to keep your vehicle. There are different conditions for preserving your home; it depends on the equity in it, when the home was bought, and the state you live in.

Knowing that bankruptcy will stay on your credit record for ten years, you may wish to find an alternative to filing bankruptcy. For more information on your options, call Fast Track. Consumers who would prefer to settle their debts need to learn how Fast Track’s Debt Settlement Program can assist in negotiating with creditors.

When we start your plan we establish an affordable monthly payment which is deposited in a settlement account in your name. Once you have the required funds in your settlement account, we will contact your creditors and make settlement offers. We will continue to work with them until all debts in the plan have been settled. Fast Track’s goal is to settle all debts in the plan for 40%-60% of what you owe.