CHAPTER 13
In Chapter 13, a consumer debtor completes a plan to repay his or her creditors. The plan in Chapter 13 is sometimes referred to as a "Wage Earner Plan." The debtor proposes a plan of repayment to his creditors over a period of between three to five years. The plan will provide for regular monthly payments to be administered by a Chapter 13 Trustee.
The Chapter 13 Trustee will take debtor's monthly payment and disburse that money to the debtor's creditors. The court must approve of the Chapter 13 plan and there are strict requirements for approval. When a debtor has completed all payments under his or her Chapter 13 plan, then the debtor obtains a discharge.
Some of the new changes in the bankruptcy law affect debtors filing for Chapter 13 as follows:
Save your Car. You can save your car by filing for Chapter 13 Bankruptcy. This is true even if the car has been repossessed (but not sold). Under the old bankruptcy law, debtors were allowed to pay car financing companies the value of the vehicle (which often would be lower than the full debt owed to the creditor). Under the new law, this is not allowed for a car purchased within about 2.5 years of the filing of the bankruptcy. Furthermore, the new law provides that a car finance company's lien in this situation cannot be released until it is paid or the plan is completed.
Save Your Home. See Stop Foreclosure page.