Chap 13 provides individuals a range of benefits over liquidation under Chap 7. Possibly most substantially, bankruptcy filed under chapter 13 provides people a chance to help save their homes from foreclosure. By filing under this chapter, people can stop foreclosure proceedings and may cure overdue mortgage payments over time.
Nevertheless, they have to still make all mortgage payments that come due during the chap 13 plan by the due date. Another advantage of chapter 13 bankruptcy is that it allows people to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 bankruptcy plan. Doing this may lower the payments.
Chap 13 also has a unique provision that safeguards third parties who are responsible to the debtor on “consumer debts.” This provision might shield co-signers. Last but not least, chap 13 acts like a consolidation loan under which the person makes the plan payments to a ch 13 trustee who then directs payments to creditors. Consumers will have no one on one contact with creditors while under ch 13 protection.
Virtually any individual, even if self-employed or operating an unincorporated business, is a candidate for chapter 13 assistance as long as the person’s unsecured debts are less than $360,475 and secured debts are less than $1,081,400. These amounts are adjusted periodically to mirror changes in the consumer price index. A corporation or partnership may not be a chap 13 debtor.
A person cannot file under chapter 13 bankruptcy or any other chapter if, during the preceding 180 days, a previous bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or conform with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover assets upon which they hold liens. Moreover, no person may be a debtor under ch 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days ahead of filing, received credit counseling from an authorized credit counseling agency either in an individual or group briefing. There are exceptions in emergency scenarios or where the U.S. trustee (or bankruptcy administrator) has established that there are insufficient accepted agencies to supply the necessary counseling. If a debt management plan is formulated while in required credit counseling, it needs to be filed with the court.
If you’re considering bankruptcy, talk to a local Massachusetts Chapter 7 attorney about your options. An experienced Massachusetts Chapter 7 attorney can provide you with which options are right for you.
Related posts:
- Chapter 7 Bankruptcy
- What is Chapter 9 Bankruptcy?
- Chapter 13 Bankruptcy
- How To File Chapter 7 Bankruptcy – Understanding The Process
- What Is The Plan In A Chapter 13 Bankruptcy?
- Chapter 7 Exemptions in Bankruptcy
- Chapter 7 Bankruptcy
- Do You Really Want To File Chapter 7 Bankruptcy?
- Strict Conditions Must Be Met To Qualify For Chapter 13 Bankruptcy
- Individual Requirements For Chapter 7 Bankruptcy Jacksonville
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