Chapter 13 Bankruptcy Evaluation

The Aspects of Chapter 13 Bankruptcy Evaluation

Chapter 13 Bankruptcy Evaluation is the chapter of the United States Bankruptcy Code allowing a person's earning to be collected by a trustee and paid to creditors by means of a court-approved debt-repayment plan if the person has a regular income.

A plan filed under Chapter 13 Bankruptcy Evaluation is sometimes called a wage-earner's plan or an income-based plan. Chapter 13 Bankruptcy Evaluation allows a debtor to propose a plan of rehabilitation to extend or reduce the balance of any obligations and to receive a discharge from unsecured debts upon completion of the payments under Chapter 13 Bankruptcy Evaluation

When someone files for bankruptcy under Chapter 13 Bankruptcy Evaluation, their aim is to have the opportunity to repay some or all the debts in their name, in better terms, lower or no interest. Unlike Chapter 7 which involves liquidation of assets, this process allows the debtor to use whatever income they may have in the future to pay off the creditors.

The most important condition for a person to be able to file Chapter 13 Bankruptcy Evaluation is that the individual must have a regular income. The United States Bankruptcy Code gives the debtor a ceiling of 5 years, within which the creditors must be paid back. While the attorney safeguards interests, the entire process is carried out under the supervision of the courts.

The following are the essential steps in filing Chapter 13 Bankruptcy Evaluation:
Ø Determine if Chapter 13 Bankruptcy Evaluation is the best solution.
Ø Prepare a budget.
Ø Examine individual cases to figure out whether require filing of Chapter 13 Bankruptcy Evaluation can be tackled in some other way.
Ø Determine and implement methods of dealing with secured creditors.
Ø Devise a Chapter 13 Bankruptcy Evaluation plan, and fill out the forms.
Ø Pay the filing fee and complete the process of filing the forms and pleadings.
Ø Attend whatever meetings you maybe required to attend; with the creditors, court hearings and the like.
Ø Obtain a discharge once the payments have all been made.

One advantage of Chapter 13 Bankruptcy Evaluation over Chapter 7 Bankruptcy is the full discharge option which is not applicable under Chapter 7 filing. For example, if a debtor manages to complete all necessary payments in the plan, he or she is given a full plan discharge. In addition, another advantage of Chapter 13 Bankruptcy Evaluation is that a repayment can be created even if creditors disagree with it, as long as it is approved by the Court.