Chapter 13:
Chapter 13 gives a time limit to pay all or some of your debts. The time limit varies subject to the regular income of an individual. Supposing you are the debtor and your unsecured debts and the secured debts are lesser than the stipulated amount mentioned in this chapter, then you can proceed under this chapter. If the unsecured and secured debts are more than the stipulated amount, then you can proceed under chapter 7.
Bankruptcy and Petition:
The debtor company has to file the bankruptcy petition in the court. The petition shall include a list of assets and liabilities, and a statement of financial affairs.
Chapter 13 and Bankruptcy Petition:
Under chapter 13, you have to file a bankruptcy petition.
You have to include in the bankruptcy petition the schedule of assets, liabilities, statement of financial affairs stating about your income and expenses. If you spend on any other miscellaneous expenses such as spousal support, alimony etc. you shall include the same in the statement of financial affairs.
Chapter 13 and Plan:
You have to prepare a Chapter 13 plan and file it along with the bankruptcy petition. Only the disposable income of your regular income will be taken to arrive at a calculation to pay the creditors.
What does chapter 13 plan provide?
- To repay the debt to the creditors within a period of 3-5 years.
- To repay from the future earning of the debtor.
Under chapter 13 plan the debtor shall be in possession of both the exempt and nonexempt properties.
Under this plan the debtor attends the meeting of the creditors, but no voting takes place. The creditors can file their objections, if the plan is not in accordance with Chapter 13.
Once the debtor pays the money as per the plan to the creditors, he is discharged from his debt even if he pays less than 100 percent of the debt.
The following debts are not discharged under a bankruptcy petition under this chapter.
- Alimony and support payments
- Student loans
- Drunk driving
- Court-ordered restitution and criminal fine
- Recent taxes
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