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CHAPTER 13 BANKRUPTCY INFORMATION
This page is all about chapter 13 bankruptcy,
starting with the onset of filing chapter 13 bankruptcy, the
appointment of chapter 13 trustee and business reorganization. This
page also provides links to other bankruptcy topics like:
bankruptcy information,
bankruptcy chapter 7,
as well as chapter 11 bankruptcy.
Under
chapter 13 bankruptcy a person may repay all or a portion of his or her debts under the supervision and protection of the bankruptcy court.
The debtor must submit to the court a plan for the repayment of all or a portion of his or her debts. The plan must be approved by the court to become effective. If the court approves the debtor’s plan, most creditors will be prohibited from collecting their claims from the debtor during the course of the case. The debtor must make regular payments to a person called the chapter 13 trustee, who collects the money paid by the debtor and disburses it to creditors in the manner called for in the plan. Upon completion of the payments, the debtor is released from liability for the remainder of his or her dischargeable debts.
What's the difference between chapter 13 and
chapter 7?
The basic difference between chapter 7 and chapter 13 is that under
chapter 7 the debtor’s nonexempt property (if any exists) is
liquidated to pay as much as possible of the debtor’s debts, while
in most chapter 13 cases a portion of the debtor’s future income is
used to pay as much of the debtor’s debts as is feasible considering
the debtor's circumstances. As a practical matter, under chapter 7
the debtor loses all or most of his or her nonexempt property and
receives a chapter 7 discharge, which releases the debtor from
liability for most debts. Under chapter 13, the debtor usually
retains his/her nonexempt property, must pay off as much of his/ her
debts as the court deems feasible, and receives a chapter 13
discharge, which is broader than a chapter 7 discharge and releases
the debtor from liability for several types of debts that are not
dischargeable under chapter 7. Chapter 13 bankruptcy normally lasts
much longer than chapter 7, and is usually more expensive for the
debtor.
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