Advantages Of Chapter 13 Bankruptcy
The chapter 13 bankruptcy has been designed to safeguard both debtors and creditors. This form of bankruptcy guarantees that creditors will receive their money back. At the same time, it permits the debtors to continue their current business operations and regain control of their finances under the guidance of a bankruptcy court-appointed trustee. In addition, the debtors are safeguarded against foreclosure, garnishment, levy, and other similar consequences. Thus, it is evident that chapter 13 bankruptcy is beneficial for both debtors and creditors.
How Do You Qualify For Chapter Thirteen Bankruptcy?
If you intend to file for bankruptcy under chapter 13 of the bankruptcy code, you must be aware of the eligibility requirements you must meet. You must have a reliable source of income that exceeds your reasonable living expenses to qualify. If your income is insufficient to cover even your reasonable living expenses, you cannot file for chapter 13 bankruptcy. If you have previously filed for bankruptcy, the bankruptcy court will order you to file again under chapter 7 of the bankruptcy code, where all of your assets will be sold to pay off your debts and you will be unable to continue operating your current business.
Must You Pay The Total Amount Of Your Debts Under Chapter 13?
The amount due for debt repayment will depend on the amount of money left over each month after covering all essential living expenditures. In some instances, when the remaining balance is substantial, the debtor is required to pay the full balance, and the repayment plan is structured accordingly. In other instances, when the remaining balance is very small, the debtor is required to pay a proportionate amount and the repayment plan is designed accordingly. In such instances, the debtor may be permitted to pay 25 cents per dollar.
Note, however, that declaring bankruptcy is not a matter of discretion. You cannot file for chapter 13 bankruptcy simply because you wish to continue operating your business and be granted the same. The bankruptcy court will examine all the evidence and then render a verdict. Therefore, the greater your knowledge of the various bankruptcy laws, the better decisions you will be able to make.""
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