Chapter 13 Bankruptcy Overview
Chapter 13 bankruptcy is not for everyone. During Chapter 13 the debtor repays their obligations in accordance with a court designed repayment plan. A debtor must have a steady source of income that will enable them to repay their debts within 5 years.
When the debtor files for Chapter 13, the court appoints a trustee who approves the debtor’s proposed repayment plan and disperses the debtor’s payments to their creditor once the plan has been approved.
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In Chapter 13 the debtor has to use his income to repay some or all of the debtor’s obligations. The debtor has to establish in the court that he/she can manage to pay the payment obligations. The debtor’s unstable or stumpy quantum of income can compel the court to reject the debtor’s petition for bankruptcy under Chapter 13.
Under Section 341 the “Creditor’s Meeting” is held, where the trustee of the Chapter 13 bankruptcy plan evaluate the budget to observe if the debtor is giving his paramount endeavor to pay back, and to authenticate or corroborate other information like trustworthiness, economic feasibility etc.
Additional Resources
- Chapter 7 Vs Chapter 13
- Recent Changes to Bankruptcy Law
- How to File Bankruptcy
- Bankruptcy Filing Fees
- The Automatic Stay
- The 341-Meeting
Bankruptcy Laws overview | Faqs on Bankruptcy | Bankruptcy Terms
