What are Chapter 13 or Reorganization Bankruptcy?

What are Chapter 13 or Reorganization Bankruptcy? "Chapter 13 Bankruptcy signifies a bankruptcy petition filed under chapter 13. In addition to filing for chapter 13 bankruptcy, a repayment plan must also be submitted. A wage earner plan is established by the attorney and approved by the magistrate. The plan consists of monthly deductions that the judge approves for payment of creditors. This plan will suggest that you can repay your required debts over a period of three or five years. A judge grants a discharge upon completion of a wage earner program lasting between three and five years. If the debtor fails to pay within three to five years, he will be subject to a 10-year fine. It is essential to understand that within six months of the completion of the wage plan, the judge will decide whether or not the debtor is entitled to a discharge (to be released from his debts). The magistrate will make a determination based on the status of the debtor in relation to the completion of the wage earner plan.Reorganization bankruptcy is another name for Chapter 13 bankruptcy. Before filing for bankruptcy, you must consult with a credit counselor or an authorized agency. Chapter 13 bankruptcy is not for everyone, in my opinion. When you file for chapter 13 bankruptcy, you must be aware that you will be required to provide the court with evidence that you can repay some or all of your debts over time. Chapter 13 bankruptcy allows you to retain your property, but requires you to pay off your debts with your income. Therefore, in order to file for chapter 13 bankruptcy, you must have a stable income so that deductions can be made.Filing for chapter 13 bankruptcy involves filing out forms in which you must disclose your assets and liabilities, etc. Chapter 13 bankruptcy is designed for those who can repay certain debts over a period of time and who have sufficient income to qualify for filing chapter 13 bankruptcy. In your chapter 13 repayment plan, you must demonstrate how you intend to pay your mandatory debts, such as child support and tax arrears, as well as information about your ability to pay your other debts over time. When submitting your repayment plan to the court, you must present valid evidence that you have done so. You must also provide valid evidence that you can pay your required debts and possibly all or a portion of your other debts over the three or five-year repayment period.The majority of courts favor chapter 13 bankruptcy filings over other bankruptcy laws. Once the court authorizes the chapter 13 plan, creditors cannot pursue debt collection actions outside the scope of the plan. The court discharges the debtor once the chapter 13 plan has been successfully completed. When a debtor is discharged, he is released from his obligations. A discharge is granted by the judge once the debtor completes the wage earner plan consisting of proposed schedule monthly deductions that have been approved by the court, and it is this monthly deducted amount that will ultimately go toward paying the debtor's creditors.
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