Chapter 13 Background
Chapter 13 is a type of bankruptcy also known as a wage earner's arrangement. The arrangement allows for individuals with a consistent income to construct a arrangement that will repay the entirety or a portion of their liabilities. Debtors suggest a repayment arrangement to install payments to creditors over a length of three to five years under this chapter. If the debtor's present income per month falls below the pertinent state median, the arrangement will fall under for three years. The exception is if the court allows for a longer length of time "for cause." (1) The arrangement will normally last for five years should the debtor's present income per month is larger than the pertinent state median. A arrangement will never provide payments for a length longer than five years. 11 U.S.C. §1322(d). During this period of time, creditors are forbidden from creating or developing collection efforts by law.
The following text converses the six elements of a chapter 13 proceeding. The topics discussed includes the benefits of choose chapter 13, eligibility requirements required for chapter 13 bankruptcy, how the proceedings for chapter 13 works, successful efforts that will make the arrangement work, and the unique discharge associated with chapter 13.
